A Systematic Review on the Phillips Curve : Examining the Relationship between Inflation, Unemployment and Well-being

Inflation and unemployment are two important macroeconomic variables that affect our daily lives. This literature review will present the correlation of unemployment and rising inflation and their effects on people’s well-being as well. A historical 10-year data on inflation and unemployment will be presented and the PRISMA method will support the research. This review will discuss the validity of the Phillips Curve hypothesis and its short- and long-term applications to the inverse relation theory. There are other events both globally and locally that can contribute to inflation hikes. Results indicate that when unemployment and inflation rates increase, the happiness index does not immediately drop. Thus, it may be inferred that a person's welfare depends on their resilience as much as it does on economic factors