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Effect of economic growth and inflation on unemployment: An empirical analysis in Senegal from 1991 to 2018

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  • Mourtalla DIAKHOUMPA

    (Senegal)

Abstract

Nowadays, unemployment is a big issue for policymakers. The high rate of unemployment can lead to instability such as crime and poverty. For this reason, unemployment can be viewed as heartbreaking for the country’s economy. This paper mainly studies the relationship between Senegal’s unemployment rate, economic growth and the inflation rate for the period 1991-2018. In this study, the autoregressive distributed lag (ARDL) modeling approach (Pesaran & Shin, 1999) and the bound test of cointegration were applied. Furthermore, the Augmented Dickey-Fuller Test (ADF) and Phillips Perron (PP) was applied to the test unit root or stationary issue. Finally, the Granger Causality Test also was conducted to check if it exists a unidirectional or bidirectional causality among variables. The findings show a negative long-run and short-run relationship between unemployment, growth, industry and age dependency ratio whereas it appears a positive relationship between unemployment and inflation in both periods. It is also indicated that there is no Granger causality relationship between unemployment, economic growth, and inflation. Whereas unemployment and economic growth have a Granger causality on the industry

Suggested Citation

  • Mourtalla DIAKHOUMPA, 2020. "Effect of economic growth and inflation on unemployment: An empirical analysis in Senegal from 1991 to 2018," Journal of Economics Library, EconSciences Journals, vol. 7(1), pages 19-38, March.
    • Handle: RePEc:cvv:journ5:v:7:y:2020:i:1:p:19-38
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    References listed on IDEAS

    as
    1. A. W. Phillips, 1958. "The Relation Between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861–1957," Economica, London School of Economics and Political Science, vol. 25(100), pages 283-299, November.
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    Keywords

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    JEL classification:

    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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