IDEAS home Printed from https://ideas.repec.org/a/vrs/ecoreg/v17y2024i4p640-661n1005.html
   My bibliography  Save this article

Impact of Fluctuations in Inflation Rate on unemployment in Algeria: A Svar Approach

Author

Listed:
  • Djamal Dekkiche

    (Tebessa University, Algeria)

  • Fairouz Cherayett

    (Oran Graduate School of Economics, Algeria)

Abstract

Subject and purpose of work This article aims to analyze the relationship between inflation rates (INF) and unemployment rates (UR) in the Algerian economy during the period 1970-2021 by studying the extent to which the unemployment rate responds to shocks and structural changes that occur at the level of the inflation rate. Materials and methods Use the structural VAR (SVAR) approach, based on RStudio output. Results The estimation results provide strong evidence in favor of the VAR (SVAR) approach. Conclusions The application of Impulse–Response Functions (IRFs) and analysis of variance (ANOVA) reveals that the occurrence of a structural shock in the inflation rate (INF) by one standard deviation leads to a positive effect on the unemployment rate (UNEM) at the beginning of the first period, and then it gradually decreases to become almost nonexistent. Therefore, the improvement in Consumer Price Index (CPI) leads to the absorption and reduction of unemployment rates (UR) to achieve stability and confirm the existence of the Phillips curve.

Suggested Citation

  • Djamal Dekkiche & Fairouz Cherayett, 2024. "Impact of Fluctuations in Inflation Rate on unemployment in Algeria: A Svar Approach," Economic and Regional Studies / Studia Ekonomiczne i Regionalne, Sciendo, vol. 17(4), pages 640-661.
    • Handle: RePEc:vrs:ecoreg:v:17:y:2024:i:4:p:640-661:n:1005
    DOI: 10.2478/ers-2024-0035
    as

    Download full text from publisher

    File URL: https://doi.org/10.2478/ers-2024-0035
    Download Restriction: no
    File URL: https://libkey.io/10.2478/ers-2024-0035?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    INF; UNEM; IRFs; SVAR model; Algerian economy;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vrs:ecoreg:v:17:y:2024:i:4:p:640-661:n:1005. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.sciendo.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.