IDEAS home Printed from https://ideas.repec.org/a/rej/journl/v19y2016i62p53-72.html
   My bibliography  Save this article

The Effects of Unemployment on Economic Growth in Greece. An ARDL Bound Test Approach

Author

Listed:
  • Nikolaos Dritsakis
  • Pavlos Stamatiou

Abstract

The aim of this paper is to investigate the relationship between unemployment rate, economic growth and inflation rate in Greece, using annual data covering the period 1995-2015. The unit root tests results indicated that the variables have different integration order. Subsequently, the bounds testing (ARDL) approach and ECM-ARDL model are applied in order to examine the long-run and the causal relationship between the variables. The empirical results of the study revealed, both in the short and long-run, that there is a unidirectional causal relationship between unemployment and economic growth with direction from unemployment to economic growth, as well as a unidirectional causality running from inflation to economic growth.

Suggested Citation

  • Nikolaos Dritsakis & Pavlos Stamatiou, 2016. "The Effects of Unemployment on Economic Growth in Greece. An ARDL Bound Test Approach," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 19(62), pages 53-72, December.
    • Handle: RePEc:rej:journl:v:19:y:2016:i:62:p:53-72
    as

    Download full text from publisher

    File URL: http://www.rejournal.eu/sites/rejournal.versatech.ro/files/articole/2017-01-03/3405/3dritsakis.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Whitney K. Newey & Kenneth D. West, 1994. "Automatic Lag Selection in Covariance Matrix Estimation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 61(4), pages 631-653.
    2. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    3. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    4. 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.
    5. Elliott, Graham & Rothenberg, Thomas J & Stock, James H, 1996. "Efficient Tests for an Autoregressive Unit Root," Econometrica, Econometric Society, vol. 64(4), pages 813-836, July.
    6. Paresh Kumar Narayan, 2005. "The saving and investment nexus for China: evidence from cointegration tests," Applied Economics, Taylor & Francis Journals, vol. 37(17), pages 1979-1990.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ugur Korkut PATA & Suleyman YURTKURAN & Adem KALCA, 2018. "A revisited causality analysis of Okun’s Law: The case of Turkey," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(4(617), W), pages 121-134, Winter.
    2. Hlongwane, Nyiko Worship & Daw, Olebogeng David, 2021. "An increase of electricity generation can lead to economic growth in South Africa," MPRA Paper 111018, University Library of Munich, Germany.
    3. Mustafa Orhan Özer, 2022. "The Relationship between Economic Growth and Unemployment Rate: Fractional Frequency Fourier ARDL Bounds Test Approach," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 72(72-1), pages 269-292, June.
    4. HYSA, Eglantina & MANSI, Egla, 2020. "Challenges Of Sustainable Economic Development In Albania," Journal of Financial and Monetary Economics, Centre of Financial and Monetary Research "Victor Slavescu", vol. 8(1), pages 197-208, October.
    5. Karikari-Apau, Ellen & Abeti, Wilson, 2019. "The Impact of Unemployment on Economic Growth in China," MPRA Paper 96100, University Library of Munich, Germany.
    6. Dankumo, Ali Madina & Ishak, Suryati & Oluwaseyi, Zubair Azeem & Onisanwa, Idowu Daniel, 2019. "Does Okun’s Law Explain the Relationship between Economic Growth and Unemployment in Nigeria?," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 53(3), pages 153-161.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Murat Cetin & Harun Demir & Selin Saygin, 2021. "Financial Development, Technological Innovation and Income Inequality: Time Series Evidence from Turkey," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 156(1), pages 47-69, July.
    2. Ahmed, Khalid, 2015. "The sheer scale of China’s urban renewal and CO2 emissions: Multiple structural breaks, long-run relationship and short-run dynamics," MPRA Paper 71035, University Library of Munich, Germany.
    3. Uddin, Gazi Salah & Shahbaz, Muhammad & Arouri, Mohamed & Teulon, Frédéric, 2014. "Financial development and poverty reduction nexus: A cointegration and causality analysis in Bangladesh," Economic Modelling, Elsevier, vol. 36(C), pages 405-412.
    4. Muhammad Shahbaz & Muhammad shahbaz Shabbir & Muhammad sabihuddin Butt, 2016. "Does Military Spending Explode External Debt in Pakistan?," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(5), pages 718-741, September.
    5. Ferda HALICIOGLU, 2012. "The Demand for Calories in Turkey," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 27(316), pages 93-108.
    6. Ali, Amjad & Ur Rehman, Hafeez, 2015. "Macroeconomic Instability and Its Impact on Gross Domestic Product: An Empirical Analysis of Pakistan," MPRA Paper 71037, University Library of Munich, Germany.
    7. Ferda Halicioglu, 2013. "Dynamics of obesity in Finland," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 40(5), pages 644-657, October.
    8. Idris, Asma Rashidah & Habibullah, Muzafar & Haji Din, Badariah, 2018. "Does Financial Development Contribute to Fertility Decline in Malaysia? An Empirical Investigation," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 52(1), pages 191-203.
    9. Shahbaz, Muhammad & Loganathan, Nanthakumar & Sbia, Rashid & Afza, Talat, 2015. "The effect of urbanization, affluence and trade openness on energy consumption: A time series analysis in Malaysia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 47(C), pages 683-693.
    10. Bibhuti Sarker & Farid Khan, 2020. "Nexus between foreign direct investment and economic growth in Bangladesh: an augmented autoregressive distributed lag bounds testing approach," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 6(1), pages 1-18, December.
    11. Halicioglu, Ferda & Andrés, Antonio R. & Yamamura, Eiji, 2012. "Modeling crime in Japan," Economic Modelling, Elsevier, vol. 29(5), pages 1640-1645.
    12. Muzammil, Muhammad, 2015. "Impact of Financial Development on Trade Balance: An ARDL Cointegration and Causality Approach for Pakistan," MPRA Paper 68587, University Library of Munich, Germany.
    13. Shahbaz, Muhammad, 2012. "Does trade openness affect long run growth? Cointegration, causality and forecast error variance decomposition tests for Pakistan," Economic Modelling, Elsevier, vol. 29(6), pages 2325-2339.
    14. Halicioglu, Ferda, 2011. "Modeling life expectancy in Turkey," Economic Modelling, Elsevier, vol. 28(5), pages 2075-2082, September.
    15. Shahbaz, Muhammad & Loganathan, Nanthakumar & Muzaffar, Ahmed Taneem & Ahmed, Khalid & Ali Jabran, Muhammad, 2016. "How urbanization affects CO2 emissions in Malaysia? The application of STIRPAT model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 83-93.
    16. Ferda Halicioglu, 2012. "Temporal causality and the dynamics of crime in Turkey," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 39(9), pages 704-720, July.
    17. Tsani, Stela Z., 2010. "Energy consumption and economic growth: A causality analysis for Greece," Energy Economics, Elsevier, vol. 32(3), pages 582-590, May.
    18. Ferda Halıcıoğlu & Kasım Eren, 2017. "Testing Twin Deficits and Saving-Investment Nexus in Turkey," Yildiz Social Science Review, Yildiz Technical University, vol. 3(1), pages 35-46.
    19. Chaido Dritsaki & Pavlos Stamatiou, 2019. "Investigating the Impact of Market Openness on Economic Growth for Poland: An Autoregressive Distributed Lag Bounds Testing Approach to Cointegration," International Journal of Economics and Financial Issues, Econjournals, vol. 9(6), pages 123-131.
    20. Eléazar Zerbo, 2015. "CO2 emissions, growth, energy consumption and foreign trade in Sub-Sahara African countries," Working Papers hal-01110769, HAL.

    More about this item

    Keywords

    unemployment; economic growth; inflation; ARDL; Vector Error Correction Model;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rej:journl:v:19:y:2016:i:62:p:53-72. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Radu Lupu (email available below). General contact details of provider: https://edirc.repec.org/data/frasero.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.