Statistical Analysis of the Relation between Inflation and Unemployment in Democratic States using Spearmans ? Correlation Coefficient with Application in Albania
The main purpose of the present study is to investigate relation between inflation
rate and unemployment rate in contemporary democratic states. Spearmans ?
correlation coefficient method is applied in our study for Albania during the period
January 2005-December 2014. Some results of the study include:
The Central Limit Theorem is not applicable for the quarterly inflation rate
as well as for quarterly unemployment rate in Albania during the period
January 2005-December 2014 at the confidence level 99.99%. The official
data for inflation and unemployment contradict the CLT at very high
confidence level 99.99%.
The inflation process in Albania during the period January 2005-December
2014 is an unfair game at the confidence level 99.2%.
The unemployment process in Albania during the period January
2005-December 2014 is an unfair game at the confidence level 99.99%.
The inflation and unemployment in Albania during the period January
2005-December 2014 are statistically dependent at the 96% confidence level.
Spearmans correlation coefficient ?= 0.387 indicates a weak positive
correlation between inflation and unemployment in Albania during the
The official data for inflation and unemployment in Albania during the
period January 2005- December 2014 are consistent with Friedmans
Keywords: Inflation, Unemployment, Relation, Spearmans ?, Friedmans
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