Downloads: 129
Research Paper | Economics | Kenya | Volume 6 Issue 6, June 2017
Effect of Inflation on Unemployment in Kenya
Moses K Macharia | Aggrey Otieno
Abstract: Unemployment arises when people are physically capable and willing to work at any existing rate of wages, but they cannot find jobs. Different theories and studies differ on the crucial determinants of unemployment in an economy. In Kenya, policies and strategies have been put in place by the government to reduce unemployment. However, this problem remains a threat to the economic growth. This study, therefore, aimed to analyze the effects of inflation on the unemployment. The causal research design was used to establish the effects of this macroeconomic variable on the unemployment rate. A Cointegration methodology was used to establish the cause-effect relationship between the variables while the hypothesis was tested at 5 % level of significance. The study revealed that inflation rate with p-value < than 0.05 had an inverse relationship with an unemployment rate in the long run as well as in short run. The study recommended that the government should come up with policies that help in ensuring a minimum possible rate of inflation in the country to achieve lowest possible levels of unemployment. The study would form the basis for further study to establish the optimal rates of the inflation and unemployment in Kenya.
Keywords: Cointegration, Inflation, Philips Curve, Unemployment
Edition: Volume 6 Issue 6, June 2017,
Pages: 1980 - 1984
Similar Articles with Keyword 'Cointegration'
Downloads: 90
Research Paper, Economics, China, Volume 6 Issue 8, August 2017
Pages: 1291 - 1295The Influence of Supply-Side Factors on the Upgrading of Chinas Industrial Structure
Juan Shang [5] | Yao Tong
Downloads: 111 | Weekly Hits: ⮙1 | Monthly Hits: ⮙1
Research Paper, Economics, Turkey, Volume 5 Issue 4, April 2016
Pages: 1888 - 1898Long and Short Term Relationship between Real Exchange Rate, Travel Revenues and Expenditure in Turkey during the Period of 2003:1-2016:1
Nazm CATALBAS