EXAMINE THE IMPACT OF INFLATION & POPULATION ON UNEMPLOYMENT RATE OF PAKISTAN & ESTABLISH RELATIONSHIP

Abstract

This study is conducted to examine the impact of inflation & population on unemployment rate of Pakistan & establish relationship, a case study of 50 years of Pakistan economics. This study uses the SPSS software to analysis the data in order to find out the long run relationship among unemployment; inflation, population and behavior in economic growth. I find evidence supporting the view that inflation in general is positively correlated with unemployment rate of the country. It also find out that population is also driven factors for rising unemployment. Apart from the study of all the countries combined, I separately analyze the effect of inflation on unemployment rate to see whether the effect of inflation is similar or different in countries with different levels. I find that although in most of the cases unemployment shows a positive and statistically significant correlation with inflation and population, however, in the case of low income countries, the relationship between unemployment, inflation and population is negative and statistically insignificant under certain specifications.