The Relationship between Unemployment and the Capital Market in Iran
Subject Areas : Bi-quarterly Journal of development economics and planningAbolfazl Taherian 1 , mahboobeh farahati 2
1 - M. A. of Economics, Faculty of Economics, Management and Administrative Sciences, Semnan University, Iran
2 - Assistant Professor of Economics, Semnan University, Semnan, Iran
Keywords: Unemployment rate, Stock price index, Iran,
Abstract :
The development of the capital market is considered as a driving force for economic activities and improving the employment environment in societies. In this regard, the aim of this research is to investigate the relationship between unemployment and the capital market (stock price index) in Iran using the autoregressive approach with distributional intervals (ARDL) and seasonal data related to the period of 2000-2019. The results of the cointegration test show that there is a negative and significant relationship between unemployment rate and the stock price index; As the stock price index increases (decreases), unemployment decreases (increases). On the other hand, the obtained results show that an increase in the exchange rate and an increase in the inflation rate lead to a decrease in the unemployment rate, while the unemployment rate increases with an increase in the GDP per capita. In addition, the results of the causality test based on the error correction model show that the stock price index is the causality of the unemployment rate in the short term. The findings of this research have important policy implications for the development of the capital market (improvement of the stock price index) with the aim of reducing the unemployment rate.
