| Abstract: |
The macroeconomic health of any nation is best understood through the interplay of three central indicators inflation, unemployment, and economic growth. This empirical study analyses the trends and interrelationships among these variables using secondary data compiled from national and international sources such as the World Bank, International Monetary Fund (IMF), Reserve Bank of India (RBI), and the Periodic Labour Force Survey (PLFS) for the period 2015–2024 [1]–[3]. The paper investigates whether the classical Phillips Curve trade-off between inflation and unemployment holds in the present-day economy, and whether Okun's Law adequately explains the relationship between GDP growth and unemployment [4], [5]. Using descriptive statistics, correlation analysis, and tabulated year-wise comparisons, the study finds a weak and unstable inflation–unemployment trade-off, a moderate negative correlation between unemployment and GDP growth, and clear structural breaks caused by exogenous shocks such as the COVID-19 pandemic. The analysis further reveals that periods of high growth (2021–2024) were accompanied by falling unemployment but persistent inflationary pressure driven by supply-side and global commodity factors rather than demand-pull forces alone [6], [7]. The paper concludes that policymakers cannot rely on a single-indicator approach; instead, a coordinated monetary–fiscal framework is required to balance growth, price stability, and employment simultaneously. The findings support the abstract's central hypothesis and reinforce the conclusion that inflation, unemployment, and growth are structurally interdependent rather than independent economic phenomena, a relationship that has strengthened rather than weakened over the study period. |
