The Role of Consumer Prices, Economic Growth and Rising Population in Determining Unemployment: A Time Series Evidence from Cyprus Economy
DOI:
https://doi.org/10.61506/01.00041Keywords:
Unemployment, Consumer Prices, Economic Growth, ARDLAbstract
Addressing an important and imperative macroeconomic issue like unemployment always remains among the top priorities of all the policy makers in almost every economy of the world. Increasing unemployment reflects the slowdown or downturn of the economy. Therefore, it is important to explore the factors which may influence unemployment in any economy. This study is aimed at investigating the role of CP- consumer prices, EG- economic growth and TP- total population on unemployment in Cyprus. After considering sample period from 1977 to 2022, the estimates of ARDL bounds test uncover the significant and positive impact of CP and TP on unemployment while EG leaves significantly inverse impact on unemployment. The study confirms presence of positive sloped Phillips curve while it also confirms presence of Okun’s law in Cyprus economy. Based on these findings, this study suggests that EG should be accelerated to condense level of unemployment but CP and TP should be controlled to stop increasing unemployment.
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