The relationship between unemployment and inflation in albania



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E.Tarelli thesis REVIEW-to print pdf
4.2. Methodology
This thesis uses the linear regression analysis to analyze the relationship between unemployment and inflation. The analysis is carried out using the statistical program
SPSS. Both the data for unemployment and inflation used in the linear regression analysis are in percentage. The dependent variable in this analysis is inflation and the independent variable is unemployment.
4.3. Analysis and Results
R (the linear correlation coefficient which measures the strength and direction of the linear relationship between variables) is a, which shows that there is not a strong relationship between the inflation (DV) and the unemployment (IV.


36 R (Coefficient of determination which measures the proportion of variability in a data set that is accounted for by a statistical model) R is 0.003 which means that 0,3% of the criterion variable are accounted for by the model used. Adjusted R square (the amount of shrinkage if this is applied to another sample, in other words the amount of predictive loss) is -1.08, which means that the linkage between the two variables is negative and relatively strong. The adjusted R square is considered the most accurate among these three components.

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