The Effects of Unemployment and Trade on Economic Growth: Case of Western Balkans

Mustafa, Edita

doi:10.69648/DTNU6090

Özet

This research paper investigates the effects of unemployment and trade on economic growth in countries of Western Balkan. Using panel data for the time span 2000-2023 and employing the fixed and random effects regression models, this study aims to provide better understanding concerning the correlation of abovementioned variables. The results suggest that there is a statistically significant effect of both independent variables, such as unemployment and trade on GDP per capita. Hausman test justified the use of the random effect model as an appropriate model for analysis. As expected considering the theoretical framework, the empirical evidence shows that higher unemployment harms GDP per capita, while trade improves it. This brings into focus the importance of trade openness especially in small open economies and proposing measures and control over the rise of unemployment.

Anahtar kelimeler

Kaynaklar

Agénor, P.-R., & Lim, K. Y. (2018). Unemployment, growth and welfare effects of labor market reforms. Journal of Macroeconomics, 58 , 19–38. https://doi.org/10.1016/j.jmacro.2018.08.009
Fanati, L., & Manfredi, P. (2003). Population, unemployment and economic growth cycles: A further explanatory perspective. Metroeconomica, 54 (2–3), 179–207. https://doi.org/10.1111/1467-999x.00165
Fujii, T., & Roland-Holst, D. (2007). How does Viet Nam's accession to the World Trade Organization change the spatial incidence of poverty? SSRN Electronic Journal . https://doi.org/10.2139/ssrn.975738
Schwickert, F., & Giucci, R. (2024). 10 years Berlin Process: Economic development in the Western Balkans since 2014 . GET Policy Study on International Trade and Regional Integration.
Berument, H., Doğan, N., & Tansel, A. (2006). Economic performance and unemployment: Evidence from an emerging economy. International Journal of Manpower, 27 (7), 604–623. https://doi.org/10.1108/01437720610708248
Hedvičáková, M., & Pozdílková, A. (2023). Analysis of key macroeconomic indicators and their relationship to unemployment in the Czech Republic. Proceedings of the Liberec Economic Forum 2023 , 416–424. https://doi.org/10.15240/tul/009/lef-2023-45
Josten, S. (2006). Dynamic fiscal policies and unemployment in a simple endogenous growth model. International Tax and Public Finance, 13 (6), 701–716. https://doi.org/10.1007/s10797-006-6603-5
Kukaj, D. (2018). Impact of unemployment on economic growth: Evidence from Western Balkans. European Journal of Marketing and Economics, 1 (1), 9–17. https://doi.org/10.26417/ejme.v1i1.p10-18
Mbogela, C. (2019). An empirical examination on trade openness and economic growth nexus in Africa. Asian Journal of Economics and Empirical Research, 6 (1), 1–15. https://doi.org/10.20448/journal.501.2019.61.1.15
Mishra, A., Gadhia, J., Kubendran, N., & Sahoo, M. (2015). Trade flows between India and other BRICS countries: An empirical analysis using gravity model. Global Business Review, 16 (1), 107–122. https://doi.org/10.1177/0972150914553523
Murjani, A. (2019). Short-run and long-run impact of inflation, unemployment, and economic growth towards poverty in Indonesia: ARDL approach. Jurnal Dinamika Ekonomi Pembangunan, 2 (1), 15–29. https://doi.org/10.14710/jdep.2.1.15-29
Nzeh, I. C., Uzoechina, I. B., Okoli, U. V., & Imoagwu, C. P. (2023). Economic performance in the Arab Maghreb Union (AMU): A focus on the contributions of economic openness and institutional quality. International Journal of Economics, Business and Entrepreneurship, 6 (2), 153–169. https://doi.org/10.23960/ijebe.v6i2.265
Okun, A. M. (1962). Potential GNP: Its measurement and significance. In Proceedings of the Business and Economic Statistics Section (pp. 98–104). American Statistical Association.
Sadiku, L., Bexheti, A., Bexheti, G., & Bilic, S. (2018). Empirical analyses of the relationship between trade and budget deficit of FYR of Macedonia. KnE Social Sciences, 3 (10), 1–15. https://doi.org/10.18502/kss.v3i10.3527
Tenzin, U. (2019). The nexus among economic growth, inflation and unemployment in Bhutan. South Asia Economic Journal, 20 (1), 94–105. https://doi.org/10.1177/1391561418822204
Velichkovska, K. (2021). Investigating the existence of the Okun's law in North Macedonia . Trends in Economics, Finance and Management Journal, 3 (2), 1–9. https://tefmj.ibupress.com/articles/investigating-the-existence-of-the-okun-s-law-in-north-macedonia
Wang, C., & Le, A. (2018). Measuring the macroeconomic performance among developed countries and Asian developing countries: Past, present, and future. Sustainability, 10 (10), 3664. https://doi.org/10.3390/su10103664
World Bank. (2025). WDIData.xlsx (Microsoft Excel data file). World Bank Open Data. https://databank.worldbank.org/source/world-development-indicators
World Bank. (2026). Western Balkans regular economic report No. 29, Spring 2026: Adjusting to shocks, mobilizing untapped potential . http://hdl.handle.net/10986/44801 https://doi.org/10.1596/44801

Yorumlar

Henüz yorum yok. Makale hakkındaki soru ve görüşlerinizi bekliyoruz.

[1] Agénor, P.-R., & Lim, K. Y. (2018). Unemployment, growth and welfare effects of labor market reforms. Journal of Macroeconomics, 58 , 19–38. https://doi.org/10.1016/j.jmacro.2018.08.009

[2] Fanati, L., & Manfredi, P. (2003). Population, unemployment and economic growth cycles: A further explanatory perspective. Metroeconomica, 54 (2–3), 179–207. https://doi.org/10.1111/1467-999x.00165

[3] Fujii, T., & Roland-Holst, D. (2007). How does Viet Nam's accession to the World Trade Organization change the spatial incidence of poverty? SSRN Electronic Journal . https://doi.org/10.2139/ssrn.975738

[4] Schwickert, F., & Giucci, R. (2024). 10 years Berlin Process: Economic development in the Western Balkans since 2014 . GET Policy Study on International Trade and Regional Integration.

[5] Berument, H., Doğan, N., & Tansel, A. (2006). Economic performance and unemployment: Evidence from an emerging economy. International Journal of Manpower, 27 (7), 604–623. https://doi.org/10.1108/01437720610708248

[6] Hedvičáková, M., & Pozdílková, A. (2023). Analysis of key macroeconomic indicators and their relationship to unemployment in the Czech Republic. Proceedings of the Liberec Economic Forum 2023 , 416–424. https://doi.org/10.15240/tul/009/lef-2023-45

[7] Josten, S. (2006). Dynamic fiscal policies and unemployment in a simple endogenous growth model. International Tax and Public Finance, 13 (6), 701–716. https://doi.org/10.1007/s10797-006-6603-5

[8] Kukaj, D. (2018). Impact of unemployment on economic growth: Evidence from Western Balkans. European Journal of Marketing and Economics, 1 (1), 9–17. https://doi.org/10.26417/ejme.v1i1.p10-18

[9] Mbogela, C. (2019). An empirical examination on trade openness and economic growth nexus in Africa. Asian Journal of Economics and Empirical Research, 6 (1), 1–15. https://doi.org/10.20448/journal.501.2019.61.1.15

[10] Mishra, A., Gadhia, J., Kubendran, N., & Sahoo, M. (2015). Trade flows between India and other BRICS countries: An empirical analysis using gravity model. Global Business Review, 16 (1), 107–122. https://doi.org/10.1177/0972150914553523

[11] Murjani, A. (2019). Short-run and long-run impact of inflation, unemployment, and economic growth towards poverty in Indonesia: ARDL approach. Jurnal Dinamika Ekonomi Pembangunan, 2 (1), 15–29. https://doi.org/10.14710/jdep.2.1.15-29

[12] Nzeh, I. C., Uzoechina, I. B., Okoli, U. V., & Imoagwu, C. P. (2023). Economic performance in the Arab Maghreb Union (AMU): A focus on the contributions of economic openness and institutional quality. International Journal of Economics, Business and Entrepreneurship, 6 (2), 153–169. https://doi.org/10.23960/ijebe.v6i2.265

[13] Okun, A. M. (1962). Potential GNP: Its measurement and significance. In Proceedings of the Business and Economic Statistics Section (pp. 98–104). American Statistical Association.

[14] Sadiku, L., Bexheti, A., Bexheti, G., & Bilic, S. (2018). Empirical analyses of the relationship between trade and budget deficit of FYR of Macedonia. KnE Social Sciences, 3 (10), 1–15. https://doi.org/10.18502/kss.v3i10.3527

[15] Tenzin, U. (2019). The nexus among economic growth, inflation and unemployment in Bhutan. South Asia Economic Journal, 20 (1), 94–105. https://doi.org/10.1177/1391561418822204

[16] Velichkovska, K. (2021). Investigating the existence of the Okun's law in North Macedonia . Trends in Economics, Finance and Management Journal, 3 (2), 1–9. https://tefmj.ibupress.com/articles/investigating-the-existence-of-the-okun-s-law-in-north-macedonia

[17] Wang, C., & Le, A. (2018). Measuring the macroeconomic performance among developed countries and Asian developing countries: Past, present, and future. Sustainability, 10 (10), 3664. https://doi.org/10.3390/su10103664

[18] World Bank. (2025). WDIData.xlsx (Microsoft Excel data file). World Bank Open Data. https://databank.worldbank.org/source/world-development-indicators

[19] World Bank. (2026). Western Balkans regular economic report No. 29, Spring 2026: Adjusting to shocks, mobilizing untapped potential . http://hdl.handle.net/10986/44801 https://doi.org/10.1596/44801