UNEMPLOYMENT RATE AND MONEY SUPPLY: A REVIEW OF CENTRAL BANK RESPONSES DURING ECONOMIC CRISES

This study examines the relationship between unemployment and central banks’ money supply decisions, with a particular focus on economic downturns and crisis periods such as the COVID-19 pandemic. Grounded in established monetary policy frameworks, including the Phillips curve and the Taylor rule, the analysis explores how rising unemployment influences expansionary monetary policy actions aimed at stimulating economic activity and supporting labor markets. Drawing on empirical evidence from both developed and developing economies, the study highlights that central banks tend to increase the money supply through interest rate reductions and asset purchase programs in response to unemployment shocks. Overall, the study underscores the critical role of unemployment as a key determinant of money supply decisions, particularly during periods of heightened economic uncertainty.