Phillips Curve and Development of the Labor Market in Russia

Abstract

In the present paper we made an attempt to check the hypothesis of emergence of negative correlation between the unemployment and inflation in Russia in 2000–2010 years. The analysis of six different price indices shows the correlation between the level of unemployment and prices growth for all indices starting from the second half of 2000-s. We also obtained estimates of NAIRU for Russia and estimates of influence of unemployment gap on inflation and wages. The results for different price measures are consistent both with each other and with results of other studies. The emergence of the correlation between the unemployment and prices can be an indicator of structural changes on the Russian labor market and its development towards the Western model.