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Causality Between Inflation, Economic Growth and Unemployment in North African Countries

Author

Listed:
  • Marwa Sahnoun

    (Faculty of Economics and Management of Sfax, University of Sfax, Tunisia)

  • Chokri Abdennadher

    (Faculty of Economics and Management of Sfax, University of Sfax, Tunisia)

Abstract

This paper investigates the relationship between unemployment rate, economic growth and inflation rate in North African countries between 1965 and 2016, using the vector error-correction model. We examine the causal relationship between economic growth, inflation and unemployment rate. In order to test the Granger causality, we applied the unit root test (Dickey–Fuller test and Phillips–Perron) and Johansen co-integration test. Our empirical results show a unidirectional causality running from inflation to economic growth, from economic growth to unemployment and from inflation to unemployment. Hence, we offer some economic implications that emerge from this study.

Suggested Citation

  • Marwa Sahnoun & Chokri Abdennadher, 2019. "Causality Between Inflation, Economic Growth and Unemployment in North African Countries," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 1, pages 77-92, March.
    • Handle: RePEc:nwe:eajour:y:2019:i:1:p:77-92
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    Citations

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    Cited by:

    1. Muhammad Ibrahim Shah, 2021. "Investigating the Role of Regional Economic Integration on Growth: Fresh Insights from South Asia," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 13(1), pages 35-57, January.
    2. Ayfer Ozyilmaz, 2022. "Relationship Between Inflation and Economic Growth in EU Countries," Journal of Economic Policy Researches, Istanbul University, Faculty of Economics, vol. 9(2), pages 425-438, July.
    3. Thanh Quang Phung & Ehsan Rasoulinezhad & Hang Luong Thi Thu, 2023. "How are FDI and green recovery related in Southeast Asian economies?," Economic Change and Restructuring, Springer, vol. 56(6), pages 3735-3755, December.
    4. Michael Takudzwa Pasara & Rufaro Garidzirai, 2020. "Causality Effects among Gross Capital Formation, Unemployment and Economic Growth in South Africa," Economies, MDPI, vol. 8(2), pages 1-12, April.
    5. McGrath, Connor, 2023. "The effect of overeducation on unemployment in OECD countries," Warwick-Monash Economics Student Papers 55, Warwick Monash Economics Student Papers.
    6. Rolle Remi Ahuru & Romanus Osabohien & Mamdouh Abdulaziz Saleh Al‐Faryan & Eseosa Joy Sowemimo, 2023. "Information and communication technology adoption and unemployment in West Africa Monetary Zone," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 388-398, January.
    7. Md Mazharul Islam & Majed Alharthi & Md Wahid Murad, 2021. "The effects of carbon emissions, rainfall, temperature, inflation, population, and unemployment on economic growth in Saudi Arabia: An ARDL investigation," PLOS ONE, Public Library of Science, vol. 16(4), pages 1-21, April.

    More about this item

    Keywords

    economic growth; unemployment; inflation; vector error-correction model;
    All these keywords.

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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