The Relationship between Unemployment and Growth: Evidence from Turkish Manufacturing Industry

Özge Bariş-Tüzemen and Samet Tüzemen

Sosyoekonomi Journal, 2019

Abstract: The aim of the study is to examine the short and the long-run relationship between the unemployment and the manufacturing industry in Turkey for the period between 2005:Q and 2017:Q4. For this purpose, firstly the combined cointegration technique, which is developed by Bayer and Hanck (2012), is applied to reveal the long-run relationship. For the short run relationship, on the other hand, the symmetric and the asymmetric causal relationships among the variables are investigated using the Hacker and Hatemi-J (2006) and Hatemi-J (2012) methods. The findings show that the variables are not cointegrated. In other words, there is no long-run relationship between the unemployment rate and the manufacturing industry growth. According to the symmetric causality test of Hacker and HatemiJ (2006), no causality is detected. However, Hatemi-J (20012) asymmetric causality test suggests that there is only one unidirectional causality. The direction of the causality is from the negative shocks of the unemployment rate to the negative shocks of the manufacturing industry. The results support the jobless growth phenomenon for the manufacturing sector in Turkey.

JEL-codes: J10 J60 O11 O14 O40 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:sos:sosjrn:190108

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