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

Marwa Sahnoun and Chokri Abdennadher
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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

Economic Alternatives, 2019, issue 1, 77-92

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.

Keywords: economic growth; unemployment; inflation; vector error-correction model (search for similar items in EconPapers)
JEL-codes: J6 O11 O47 O55 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (7)

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