Designing Philips Model and Philips Curve of Fractional Order in the Economy of Iran

Negative relation between unemployment and inflation is known as the Philips model, which states, when inflation is high, unemploymentgently decries and when unemployment is low, salaries will increase rapidly. While economic planners of the country tend to impartthis situation highly, it would fall down, because frequent increase of inflation with the hope of keeping unemployment low permanently,ultimately will cause rise in expected inflation of organizations and lead to change in their recruitment decisions. In a section of this model,it has also analyzed, relation between income, investment, and consumption. Regular Philips model with derivative deals with firstand second level of calculations, however this model has faced many weaknesses and deficiencies in economic cycle of Iran. Regarding itsimplementation in the economy of Iran, in this research, through substitution of Caputo fractional-order derivatives, we reach out Philipsmodel of Fractional-order . Moreover, by numerical calculation of resulted equations and using Maple software, we over reach to Philipscurve of Fractional-order in multiple various orders. According to achieved results, this model highly depends on derivation ordersand different outcomes will be acquired through various derivation orders. Acquired model in the economy of Iran (situational formatin Sugar and Sugar cube Industries) has been studied through phasic technic which proves meaningfulness of relations between variablesof the model.

Keywords:

Unemployment , Inflation , Philips model , Philips Curve , Caputo fractional order derivatives