The unemployment rate and its determinants: the Malaysian case

Aiman Ghafar and Abul Masih

MPRA Paper from University Library of Munich, Germany

Abstract: The focus of this paper is on the determinants of unemployment rate. Malaysia is used as a case study. The standard time series techniques are used for the analysis. The variables are bound together by theoretical relation as evidenced in their being cointegrated. Based on the variance decomposition analysis, the unemployment rate is driven mostly by inflation rate followed by the growth of population and private consumption expenditures. The results are consistent with the well-known ‘Phillips curve’ (Phillips,1958). The results are plausible and contain strong policy implications for the emerging countries like Malaysia.

Keywords: Determinants of unemployment rate; VECM; VDC; Malaysia (search for similar items in EconPapers)
JEL-codes: C22 C58 E24 (search for similar items in EconPapers)
Date: 2017-05-25
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