Short and Long Term Relationship between Economic Growth and Unemployment in Egypt: An Empirical Analysis

Abstract

This study aims to examine the relationship between growth and unemployment in Egypt between 2006 Q1 - 2013 Q2. The Dickey-Fuller (ADF) unit root test, the Johansen Co-integration test and the Standard Granger Causality test were applied to examine the relationship between unemployment and Gross Domestic Product (GDP). The results indicated there were no co-integration relationship between the variables of unemployment and GDP specifically implying there is no long-term relationship between the variables. However, in the short term, there is a direct causality relationship have been observed between the unemployment rate to economic growth.

DOI: 10.5901/mjss.2015.v6n4s3p454