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Evaluating the Dilemma of Inflation, Poverty and Unemployment

Author

Listed:
  • Mehboob Ul Hassan

    (Department of Economics and Agricultural Economics University of Agricultural Faisalabad)

  • Muhammad Waqas Khalid

    (Department of Economics and Agri.Economics, PMAS Arid Agriculture Rawalpindi)

  • Ashar Sultan Kayani

    (Department of Economics and Agri.Economics, PMAS Arid Agriculture Rawalpindi)

Abstract

The main aim of this study is to investigate the existence of long run relationship among poverty, inflation, and unemployment. For the sake of empirical analysis this study employs ARDL approach to find out long run relationships by using data from 1975-2013 from WDI. The reverse of Human development index (HDI) has been used as a proxy of multidimensional poverty. The index has been constructed on the same lines as the HDI is developed by UNDP with the help of four indicators i.e. life expectancy, infant mortality, per capita income, and mean year schooling. Independent variables are unemployment, inflation, and dependency ratio, and population growth, government expenditures on education, trade openness, and remittances. The empirical results suggested the validation of employing ARDL holds, and the existence of long run relationship between poverty, inflation, and unemployment has been found. The results are suggestive that unemployment and inflation both bring about increase in poverty. Further findings of the study indicate that dependency ratio, remittances, and population growth are also having significant impacts on poverty in the long run. Finally these results are not only valid for the long run but they even held in the short run as well.

Suggested Citation

  • Mehboob Ul Hassan & Muhammad Waqas Khalid & Ashar Sultan Kayani, 2016. "Evaluating the Dilemma of Inflation, Poverty and Unemployment," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 5(2), pages 67-82, June.
    • Handle: RePEc:rfh:bbejor:v:5:y:2016:i:2:p:67-82
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    References listed on IDEAS

    as
    1. Chani, Muhammad Irfan & Pervaiz, Zahid & Jan, Sajjad Ahmad & Ali, Amjad & Chaudhary, Amatul R., 2011. "Poverty, inflation and economic growth: empirical evidence from Pakistan," MPRA Paper 34290, University Library of Munich, Germany, revised 2011.
    2. Mohammed Yelwa & Okoroafor O.K.David & Awe, Emmanuel Omoniyi, 2015. "Analysis of the Relationship between Inflation, Unemployment and Economic Growth in Nigeria: 1987-2012," Applied Economics and Finance, Redfame publishing, vol. 2(3), pages 102-109, August.
    3. Ashish Bharadwaj, 2014. "Is poverty the mother of crime? Empirical evidence of the impact of socioeconomic factors on crime in India," Economic Analysis Working Papers (2002-2010). Atlantic Review of Economics (2011-2016), Colexio de Economistas de A Coruña, Spain and Fundación Una Galicia Moderna, vol. 1, pages 1-1, June.
    4. Pamela F Resurreccion, 2014. "Linking Unemployment to Inflation and Economic Growth: Toward A Better Understanding of Unemployment in the Philippines," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 2(4), pages 156-168.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Inflation; Multidimensional Poverty; Dependency Ratio; Population Growth; Human Development Index;
    All these keywords.

    JEL classification:

    • P24 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation
    • P36 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
    • P42 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Productive Enterprises; Factor and Product Markets; Prices

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