Page 9 - AEI Insights 2020 - Vol. 6, Issue 1

Furuoka et al, 2020

The country suffered from deflation from 1998 to 1999. In 2002, the price level in the country
decreased by 2.2 percent. Brunei suffered again a prolonged deflation from 2014 to 2017.

14 25
12
20
10
8 15
6
10
4
5
2
0 0
-2
96 98 00 02 04 06 08 10 12 14 16 -5
96 98 00 02 04 06 08 10 12 14 16
Indonesia Malaysia
Philippines Singapore Brunei Cambodia Lao
Thailand Myanmar Vietnam
Figure 2: Inflation rates in ASEAN

Countries Mean Maximum Minimum Standard
deviation

Brunei 0.3 2.0 -2.2 0.9
Indonesia 5.5 12.9 1.3 2.7
Cambodia 3.7 19.3 -0.6 4.0

Lao 5.5 21.4 0.1 4.4
Malaysia 2.2 5.0 0.5 1.1

Myanmar 6.3 19.3 -0.6 5.3
Philippines 3.1 7.0 0.7 1.3
Singapore 1.4 6.0 -0.6 1.8

Thailand 2.1 5.6 -1.0 1.8
Vietnam 5.2 18.6 -0.8 4.8

Table 2: Main indicators of inflation in ASEAN

Many proponents of neoclassical economics believe in the existence of natural rate of
unemployment in the labour market. The natural rate of unemployment could be defined as an
equilibrium level of unemployment rate which would be determined by structural labour
market imperfections, such as random movement of labour supply or demand, cost of finding
a job or cost of moving from one job to another (Friedman, 1968). The natural rate of
unemployment could be estimated by an estimation procedure suggested by Ball and Mankiw
(2002). A basic relationship between inflation and unemployment could be expressed as (Ball
and Mankiw, 2002):

= − (1)

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