The determinants of unemployment in Brazil and Mexico

Carlos Henrique Rocha and José Angelo C. A. Divino
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Carlos Henrique Rocha: UCB
José Angelo C. A. Divino: UCB

Economia, 2002, vol. 3, issue 2, pages 303-315

Abstract: This paper examines the relationship amongst unemployment and interest rates, taxes on household expenditures and exchange rates for Brazil and Mexico. The theoretical framework is based on concepts or corporate finance and firm's profit-maximizing choice. The empirical analysis is derived from autoregressive distributed lag models (ADL). The estimated results indicate that unemployment is positively related to interest rates and negatively associated to taxes on consumption for both countries. Exchange rates, however, seem to be negatively associated with unemployment in Mexico and positively related with unemployment in Brazil.

Keywords: unemployment; real interest rate; exchange rate; taxes on consumption (search for similar items in EconPapers)
JEL-codes: C32 E24 E62 (search for similar items in EconPapers)
Date: 2002

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