Examining the Trade-Off between Inflation and Unemployment: An Empirical Investigation

Across the world, many countries are currently witnessing a historic wave of inflation while only a very few have partially recovered from it. This may be attributed to the subsequent disruptions in production and supply chain brought about by the Covid-19 pandemic. Inflation has brought about a huge shift in global markets. This goes beyond production. During the peak of the pandemic, consumer spending patterns were significantly inhibited by stringent lockdown and social distancing policies. As a result, there was reduced efficiency in almost every aspect of production. In fact, these effects were felt more on supply chain. This can be evidenced by a limited supply of man-power to facilitate the production and movement of the produced goods, in other words, increased demand for labor.