The asymmetric impact of oil price shocks on the evolution of the unemployment rate in Algeria: New evidence using NARDL analysis

  • Mohamed Dahmani Driouche
  • Abdelatif Hamrit
Keywords: Positive and negative oil price shocks; unemployment; asymmetric effects, NARDL.

Abstract

This research aims to study and analyze the asymmetric effects of oil price shocks and the evolution of certain macroeconomic variables on unemployment rates in Algeria during the period 1990-2017 and the use of the nonlinear NARDL model. In the long term, the results showed that there is an asymmetric cointegration which means that there are long-term relationships between the variables of our econometric study and asymmetric effects as well. This is due to the negative shocks of oil prices that have a greater impact on unemployment rates than positive shocks. Also, the effects of oil prices in the short term were asymmetric as diagnostic tests showed the advantage of the first estimated model. The results also showed that economic growth rates have a significant impact on unemployment rates compared to the investment expenditures, as well as the size of loans provided to the private sector. Moreover, the results indicate that the non-hydrocarbon GDP growth is distorted and may not reflect the contribution of this sector in reducing unemployment, as its rise is caused by the previous booms in the oil sector.

Keywords: Positive and negative oil price shocks; unemployment; asymmetric effects, NARDL.

Published
2020-11-24
Section
Articles

Journal Identifiers


eISSN: 1012-0009
print ISSN: 2437-0568