Unleashing the power of economic forces: exploring the relationship between macroeconomic factors and unemployment in Norway and uk using ARDL approach
DOI:
https://doi.org/10.23925/2179-3565.2023v14i3p04-20Palavras-chave:
Desemprego, Fator Macroeconômico, Reino Unido e Noruega, ARDL bounce testResumo
The problem of unemployment is a global issue and it is vital to carry out detailed examination of this issue. We need to identify and analyze several factors affecting unemployment in a country. The aim of this research is to determine how various macroeconomic factors and unemployment interact with each other. This includes trade, oil consumption, domestic credit to private sector, gross capital formation and inflation in context of Norway and UK. The basic purpose of this study is to analyze whether the effect of these macroeconomic factors on unemployment is significant or insignificant. In order to conduct this study, period of 1979-2021 is used. In order To find out the impact of independent variables on unemployment, this study executes the KPSS and NG- Perron test to determine whether a variable is stationary or not, and then apply ARDL in order to test the long run and short run Co-integration between unemployment and independent variables. According to our findings, there is a significant long run Cointegration present between Unemployment and trade, domestic bank lending to the private sector, gross capital formation, Oil consumption and show insignificant relation with inflation in case of Norway. If we talk about UK all these factor are significantly Co-integrated with unemployment in long run. Diagnostic tests are also considered in this study which include Serial correlation, Heteroscedasticity, normality, functional form, CUSUM and CUSUM square. The results provide a non-significant probability value higher than 0.1 which implies that the error term has no serial correlation issue and variance of error is homoscedastic along with well-defined functional forms and errors exhibit characteristics of a normal distribution. CUSUM and CUSUM SQUARE for both countries show stability of mean of error term and variance of error term.
Key words; - Unemployment, Macroeconomics factor, unemployment, UK and Norway, ARDL bounce test
Referências
Adekoya, O. B. (2021). Revisiting oil consumption-economic growth nexus: Resource-curse and scarcity tales. Resources Policy, 70, 101911.
Al-Taie, A. H. H., Ali, F. K., & Mohammad, A. H. (2023). Analysis of Relationship Between Trade Policy Trends and Unemployment Rates in Iraq. International Journal of Professional Business Review, 8(1), e0935-e0935. https://doi.org/10.26668/businessreview/2023.v8i1.935.
Butiong, E. J., Gocalin, N., Garcia-Vigonte, F., & Abante, M. V. (2023). A Study on the Inflation and Unemployment of the Philippines through the Years. Available at SSRN 4368961.
Dritsakis, N., & Stamatiou, P. (2016). The effects of unemployment on economic growth in Greece. An ARDL bound test approach. The Romanian Economic Journal, 19(62), 53-72.
Emerson, J. (2011). Unemployment and labor force participation in the United States. Economics Letters, 111(3), 203-206.
Khan, I., Xue, J., Zaman, S., & Mehmood, Z. (2022). Nexus Between FDI, Economic Growth, Industrialization, and Employment Opportunities: Empirical Evidence from Pakistan. Journal of the Knowledge Economy. doi:10.1007/s13132-022-01006-w. https://doi.org/10.1007/s13132-022-01006-w
Khan, M. I., Ghauri, S. P., Siddiqui, A. A., & Iqbal, A. (2023). Causality between Economic Development and Unemployment: Using ARDL Model. International Journal of Social Science & Entrepreneurship, 3(1), 466-488.
Khobai, H., Kolisi, N., Moyo, C., Anyikwa, I., & Dingela, S. (2020). Renewable energy consumption and unemployment in South Africa.
Maqbool, M. S., Mahmood, T., Sattar, A., Bhalli, M. J. P. E., & Review, S. (2013). Determinants of unemployment: Empirical evidences from Pakistan. 191-208.
Moore, J. D., & Donaldson, J. A. (2016). Human-scale economics: economic growth and poverty reduction in Northeastern Thailand. World Development, 85, 1-15.
Moreno-Galbis, E. (2012). The impact of TFP growth on the unemployment rate: Does on-the-job training matter? European Economic Review, 56(8), 1692-1713.
Nayyf, Y. S., Ali, Z. T., & Kareem, B. A. A. (2021). Estimating the impact of financial sector development in reducing unemployment in Chile (1991-2017). Academy of Entrepreneurship Journal, 27, 1-11.
Nwosa, P., Keji, S., Adegboyo, S., & Fasina, O. (2020). Trade openness and unemployment rate in Nigeria. Oradea Journal of Business and Economics, 5(2), 52-62.
Obisike, N. E., Okoli, U. V., Onwuka, I. N., & Mba, S. E. (2020). Impact of government expenditure on unemployment in Nigeria: Evidence from social expenditure. International Journal of Social Sciences and Management Research, 6(1), 65-76.
Pasara, M. T., & Garidzirai, R. (2020). Causality effects among gross capital formation, unemployment and economic growth in South Africa. Economics, 8(2), 26. https://doi.org/10.3390/economies8020026.
Popescu, C. C., & Diaconu, L. (2022). Inflation–Unemployment Dilemma. A Cross-Country Analysis. Scientific Annals of Economics and Business, 69(3), 377-392.
Riniati, M., Yunitasari, D., & Arishanti, D. (2022). Study of Response Analysis of Youth Unemployment Rate in Economy Globalization In Asean. Media Trend, 17(2), 424-432.
Sahoo, M., & Sahoo, J. (2019). The relationship between unemployment and some macroeconomic variables: Empirical evidence from India. Theoretical & Applied Economics, 26(1).
Salad, S. O. (2023). Effects of unemployment on economic growth in Somalia. İstanbul Gelişim Üniversitesi Lisansüstü Eğitim Enstitüsü. http://95.183.203.22/xmlui/bitstream/handle/11363/4509/786582.pdf?sequence=1&isAllowed=y
Sekwati, D., & Dagume, M. A. (2023). Effect of Unemployment and Inflation on Economic Growth in South Africa. International Journal of Economics and Financial Issues, 13(1), 35. https://doi.org/10.32479/ijefi.13447.
Shah, S. Z. A., Shabbir, M. R., & Parveen, S. (2022). The Impact of Unemployment on Economic Growth in Pakistan: An Empirical Investigation. iRASD Journal of Economics, 4(1), 78-87.
Sköld, E. (2020). The Relationship between Unemployment and Oil Price, Oil Price Uncertainty, and Interest Rates in Small Open Economies: A study on Sweden, Norway, Denmark, and Finland. In.
World Development Indicators. (2023). from The World Bank. https://databank.worldbank.org/source/world-development-indicators
Downloads
Publicado
Edição
Seção
Licença
Esta obra está licenciada sob uma licença Creative Commons Atribuição - No comercial - Sin derivaciones 4.0 Internacional
1.O(s) autor(es) autoriza(m) a publicação do artigo na revista;
2.O(s) autor(es) garante(m) que a contribuição é original e inédita e que não está em processo de avaliação em outra(s) revista(s);
3.A revista não se responsabiliza pelas opiniões, ideias e conceitos emitidos nos textos, por serem de inteira responsabilidade de seu(s) autor(es);
4.É reservado aos editores o direito de proceder ajustes textuais e de adequação do artigos às normas da publicação.
1.1 Copyright Statement
This journal is licensed under a Creative Commons Attribution-Non Commercial-No Derivers 4.0 International license.
1. The author (s) authorize the publication of the article in the journal;
2. The author (s) warrant that the contribution is original and unpublished and is not in the process of being evaluated in other journal (s);
3. The journal is not responsible for the opinions, ideas and concepts emitted in the texts, as they are the sole responsibility of its author (s);
4. The editors are entitled to make textual adjustments and to adapt the articles to the standards of publication.
