Measuring and analyzing the relationship between economic growth and unemployment rates according to Okun's Law in the Iraqi economy for the period (2004-2023)

Abstract

Studying the relationship between macroeconomic variables is a fundamental issue of great importance in the field of economic research and studies, given its direct impact on formulating macroeconomic policies and achieving economic stability. The importance of this study lies in shedding light on the relationship between economic growth rates and unemployment rates in Iraq, based on Okun's Law. Given the fact that most previous economic studies that addressed Okun's Law focused primarily on various economies around the world, whether developed or developing, studying this relationship in the context of the Iraqi economy is of particular importance. This study aims to measure and analyze the relationship between economic growth and unemployment in the Iraqi economy, relying on time series data from the World Bank (WB) statistics for the period (2004-2023). The Autoregressive Lag-Time Delay (ARDL) model was used as an analytical tool to study the relationship between economic growth and unemployment variables in the short and long term, as well as the adjustment rate parameter. The results of the study showed that there is a significant inverse relationship at the level of (5%) between economic growth and the unemployment rate. This is consistent with Okun's law, which indicates that high rates of economic growth have contributed to reducing unemployment levels. This reflects the dynamics of the Iraqi economy during this period, and confirms the importance of adopting economic policies that promote sustainable growth to achieve economic stability and reduce unemployment rates.