The Effects of Unemployment on Economic Growth in Greece. An ARDL Bound Test Approach

Nikolaos Dritsakis and Pavlos Stamatiou

Romanian Economic Journal, 2016, vol. 19, issue 62, 53-72

Abstract: The aim of this paper is to investigate the relationship between unemployment rate, economic growth and inflation rate in Greece, using annual data covering the period 1995-2015. The unit root tests results indicated that the variables have different integration order. Subsequently, the bounds testing (ARDL) approach and ECM-ARDL model are applied in order to examine the long-run and the causal relationship between the variables. The empirical results of the study revealed, both in the short and long-run, that there is a unidirectional causal relationship between unemployment and economic growth with direction from unemployment to economic growth, as well as a unidirectional causality running from inflation to economic growth.

Keywords: unemployment; economic growth; inflation; ARDL; Vector Error Correction Model (search for similar items in EconPapers)
JEL-codes: C22 E31 E50 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:rej:journl:v:19:y:2016:i:62:p:53-72

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