The Relationship Between Unemployment Rate and Economic Growth: The Case of Turkey

Year 2017, Volume: 5 Issue: 1, 1 - 8, 01.01.2017

Mehmet Mucuk Ayşen Edirneligil Mustafa Gerçeker

https://izlik.org/JA28JL25XG

Abstract

The Relationship Between Unemployment Rate and Economic Growth: The Case of Turkey

https://izlik.org/JA28JL25XG

Abstract

This paper investigates the relationship between unemployment rate and economic growth rate over the period 2002-2014 for Turkey. In this context, Johansen cointegration test and vector error correction model is applied to determine this relationship. Empirical findings show that the variables are not cointegrated so; there is no causal link between the two variables. This result does not support the Okun Law. However, in the short run growth shock have a negative impact on unemployment rate. On the other hand, shocks in unemployment have positive impact on the growth. The findings of this study have important policy implications.

Keywords

Unemployment , Economic Growth , Turkish Economy