– The main point of this study is to analyse the relationship between unemployment and inflation in Turkey. The study investigation period is the years between 1988 and 2002. Vector Autoregressive Model (VAR) and impulseresponse analysis are used in the study to explain the relationship. According to the results, there is a negative way relationship between unemployment and inflation. This result is a supportive of Philips curve. This conclusion is important for stating an optimal inflation target and therefore obtaining a natural unemployment rate