A Dynamic Model For Analyzing The Dialectical Relationship Between Public Expenditure and Unemployment Rates
Main Article Content
Abstract
This paper examines the dialectical relationship between government expenditure and
unemployment rates in six Arab countries: Egypt, Jordan, Algeria, Morocco, Tunisia and Sudan
during the period 1990 – 2018. The researcher built three dynamic models. The first is a simple
model included the government expenditures as independent variable and unemployment rates as
dependent variable, the second model included government expenditure, exchange rates, inflation
rates and domestic investment as independent variables and Unemployment rate as dependent
variable and the third model included the gross domestic product in addition to the variables in the
second model. Database was built as a panel data and using Dynamic Panel-data Estimation
(GMM) to analysis the data. The results showed a weak inverse relationship between government
expenditure and unemployment rates in the first and second models, while the positive correlation
in the third model. The study recommended that this expenditure should be diversified from current
and military expenditure to the industrial, agricultural and service sectors, which can accommodate
a large number of the unemployed in the country.
Article Details
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