Adaptive Comparison of Phillips Curveand Determination of the Natural Rate of Unemployment in Iran

The issue of this paper is the relationships between inflation rate , unemployment rate and production, one of the main discussions in macroeconomic models. This 'paper is an effort 'to determine the relationship between the above- mentioned phenomenon in the short-and in the long 11m as well as to calculate the natural rate of unemployed in Iran. For this purpose, the theoretical models were tested using the time series analysis as well as other econometric methods. The series were tested as to their stationary and nonstationary nature. The results are as follows:The existence of a significant relationship between inflation , rate and unemployment rate in Iran was verified. We realized that there is a negative relationship between the rate of inflation and that of unemployment in Iran. As for ' the rational expectation theory, a non-rational ' expectation model explained the expected inflation better than weighted or adaptive expectations models. The hypothesis of the natural rate of unemployment was tested using co - integration methods and it was also verified. Given long run growth of productivity (1.7 percent), the natural rate of unemployment in Iran would be 7.6 percent