Asymmetric Effects of Inflation on Unemployment Rate in Iraq country Using Quantile Regression Method

Hashemi Dizaj, Abdulrahim; Ali Mohammad Al-Tamimi, Abbas

Asymmetric Effects of Inflation on Unemployment Rate in Iraq country Using Quantile Regression Method

Document Type : Origional Article

Authors

Abdulrahim Hashemi dizaj ¹

Abbas Ali Mohammad Al-Tamimi ²

¹ Associate Professor, Department of Economics, Faculty of Social Sciences, University of Mohaghegh Ardabili, Ardabil, Iran.

² MSc Student, Department of Economics, Faculty of Social Sciences, University of Mohaghegh Ardabili, Ardabil, Iran.

Abstract

Background and Objective: Investigating the factors affecting the unemployment rate as one of the most important macroeconomic indicators has been one of the topics studied by many researchers, scholars, and policymakers. The existence of a stable and balanced relationship between inflation and unemployment is very important and fundamental for maintaining international competitiveness in the economy. Uncontrolled inflation can greatly reduce the country's competitiveness by increasing production costs, reducing export competitiveness, and attracting less foreign investment. . Given the importance of the issue, the main objective of this study is to investigate the asymmetric effects of inflation on the unemployment rate in Iraq.
Methodology: In this study, the quantile regression method was used to investigate the asymmetric effects of inflation on the unemployment rate in Iraq during the period 1995 to 2023.
Findings and Conclusion: The results show that the inflation rate had a positive and significant effect on the unemployment rate, and these effects were strengthened in the high quantiles of the unemployment rate. Also, according to the results, the effects of inflation on the unemployment rate in Iraq were symmetric. According to these results, it can be concluded that the Phillips curve, which indicates an inverse relationship between inflation and unemployment rate, is not confirmed in Iraq. Therefore, to improve the unemployment rate, supply-side policies should be used and demand-side policies should be avoided.

Keywords

inflation

unemployment rate

quantile regression

Iraq

Subjects

Urban & Regional Economic

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