Preprint Article Version 1 Preserved in Portico This version is not peer-reviewed

Economic Growth And Unemployment: An Empirical Assessment of Okun’s Law In The Case of Liberia

Version 1 : Received: 28 May 2021 / Approved: 31 May 2021 / Online: 31 May 2021 (12:03:35 CEST)

How to cite: Conteh, K. Economic Growth And Unemployment: An Empirical Assessment of Okun’s Law In The Case of Liberia. Preprints 2021, 2021050759 (doi: 10.20944/preprints202105.0759.v1). Conteh, K. Economic Growth And Unemployment: An Empirical Assessment of Okun’s Law In The Case of Liberia. Preprints 2021, 2021050759 (doi: 10.20944/preprints202105.0759.v1).

Abstract

The aim of this research is to look at the relationship between economic growth and unemployment in Liberia from 2001 to 2019. To investigate the association between unemployment and Gross Domestic Product (GDP), the unit root test, the Augmented Dickey-Fuller (ADF) Co-integration test, and the Standard Granger Causality test were used. The Auto Regressive Distribution Lag (ARDL) bounds test is used to decide if the variables have a long run linkage. The ARDL model findings indicate that there is no long-run association between unemployment and economic growth. The findings of this analysis have especially significant policy implications for Liberian economic policymakers. The observational findings revealed a negligible association between unemployment and economic growth in both the long and short term. The Liberian government should redirect its spending toward activities that directly and indirectly promote the creation of employment and decent jobs, a conducive environment and flexible labor market policies or legislation that are not impediments to job creation should be created, and finally, the government should prioritize industries that promote labor intensive.

Subject Areas

Okun's law; unemployment rate; Economic Growth; Liberia

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