The Phillips Curve in Bulgaria: Is the Trade-Off between Inflation and Unemployment Possible?

Ivan Todorov and Gergana Angelova
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Ivan Todorov: Department of Finance and Accounting, South-West University Neofit Rilski, Bulgaria
Gergana Angelova: Department of Tourism, South-West University Neofit Rilski, Bulgaria

Economic Alternatives, 2026, issue 2, 433-446

Abstract: The objective of this paper was to estimate the inflation-unemployment nexus and the opportunities for inflation-unemployment trade-off in Bulgaria. An ordinary least squares (OLS) regression of annual time series data for the period 2003-2022 was employed to test the Phillips curve hypothesis for Bulgaria. The results from the empirical analysis showed that: (i) a negative relationship (both linear and non-linear) exists between inflation and unemployment in Bulgaria; (ii) Bulgarian policy makers can decrease inflation by three percent at the cost of one percent increase in unemployment by implementing restrictive macroeconomic policies.

Keywords: Bulgaria; Inflation; Unemployment; Phillips curve (search for similar items in EconPapers)
JEL-codes: E24 E31 J64 (search for similar items in EconPapers)
Date: 2026
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