Effect of Unemployment and Inflation on Economic Growth in South Africa

Dimakatso Sekwati and Mbulaheni Albert Dagume
Additional contact information
Dimakatso Sekwati: Department of Economics, University of Venda, South Africa.
Mbulaheni Albert Dagume: University of Venda, Private Bag X 5050, Thohoyandou, South Africa

International Journal of Economics and Financial Issues, 2023, vol. 13, issue 1, 35-45

Abstract: The key macroeconomic objectives being pursued by any developing country are low unemployment, low inflation, and sustainable growth. The main aim of this study was to analyze the effect of unemployment and inflation on economic growth in South Africa for the period of 1994 to 2018, using quarterly data. The results of the unit root test using the Augmented Dickey Fuller and Phillips Perron tests showed that all the variables have a unit root in levels and became stationary after first differencing. The Johansen co-integration test outcomes showed that there is a long-run relationship among variables, and the Vector error correlation model confirmed that inflation and unemployment have a negative impact on economic growth. Furthermore, the results of the tests for White Heteroskedasticity, Jarque -Bera and Serial correlation LM reveal that there is no problem of Heteroskedasticity, data distribution or serial correlation respectively. The government should implement workable pricing regulations and enforce them to maintain stable price levels. The government should also through the Department of Higher Education and Training, establish a structure that connects the educational system with the industries in South Africa, allowing for the development of skills at the tertiary level and increasing employment.

Keywords: Economic growth; Real GDP per capita; Johansen cointegration; South Africa (search for similar items in EconPapers)
JEL-codes: E24 E31 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.econjournals.com/index.php/ijefi/article/download/13447/7074 (application/pdf)
https://www.econjournals.com/index.php/ijefi/article/view/13447 (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:eco:journ1:2023-01-5

Access Statistics for this article

International Journal of Economics and Financial Issues is currently edited by Ilhan Ozturk

More articles in International Journal of Economics and Financial Issues from Econjournals
Bibliographic data for series maintained by Ilhan Ozturk ().