The Relationship between Economic Growth and Unemployment Rate: Fractional Frequency Fourier ARDL Bounds Test Approach

Mustafa Orhan Özer ()
Additional contact information
Mustafa Orhan Özer: Anadolu University, Open Education Faculty, Department of Economics and Administrative Programs, Eskişehir, Turkiye

Istanbul Journal of Economics-Istanbul Iktisat Dergisi, 2022, vol. 72, issue 72-1, 269-292

Abstract: The present study investigates the relationship between economic growth and the unemployment rate in Turkiye. First, the stationarity of the variables is examined using the fractional frequency Fourier Augmented Dickey–Fuller unit root test in the study, which covers the quarterly time series from 2005:Q1 to 2021:Q1. The unit root test reveals that the variables are I(1) for economic growth and I(0) for the unemployment rate. Afterward, the fractional frequency Fourier autoregressive distributed lag (ARDL) bound test was used to assess the existence of the long-run relationship between the variables. The findings of the Fourier bootstrap ARDL procedure reveal a unidirectional negative relationship between economic growth and the unemployment rate in both the long and short run. A unit increase in economic growth reduces unemployment rate by 1.48 and 0.09 units in the long and short run, respectively. Finally, the fractional frequency Fourier Toda–Yamamoto causality test is used, with the results supporting the Fourier ARDL test findings.

Keywords: Economic growth; Unemployment rate; Okun’s law JEL Classification: C32; E24; O47 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://cdn.istanbul.edu.tr/file/JTA6CLJ8T5/2E2ACAB55F5A446492F5F08AD29A7833 (application/pdf)
https://iupress.istanbul.edu.tr/en/journal/ije/art ... inir-testi-yaklasimi (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ist:journl:v:72:y:2022:i:1:p:269-292

DOI: 10.26650/ISTJECON2022-1020006

Access Statistics for this article

Istanbul Journal of Economics-Istanbul Iktisat Dergisi is currently edited by Gökhan Karabulut

More articles in Istanbul Journal of Economics-Istanbul Iktisat Dergisi from Istanbul University, Faculty of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Istanbul University Press Operational Team (Ertuğrul YAŞAR) ().