THE IMPACT OF UNEMPLOYMENT AND INFLATION ON ECONOMIC GROWTH IN TUKEY

Abstract

Introduction: The impact of unemployment and inflation on economic growth in Turkey is considered as an important issue in the economic literature on Turkey. Unemployment and inflation are factors that directly affect economic stability and the welfare of citizens. In this context, it is critical to understand and interpret the effects of unemployment and inflation rates on economic growth and to formulate and implement economic policies in line with the realities. Analyzing Turkey's unemployment and inflation dynamics is a very important issue in this sense. In addition, this concept and data play an important role in providing guidance for policymakers in evaluating economic performance and implementing new economic policies. When today's Turkish economy is evaluated in general terms, it reveals the reality of Turkey, which has suffered serious losses in the last five years, a decrease in purchasing power, an increase in the prices of goods and services and an inflation rate of 150%. Objective: To investigate and determine the effects of unemployment and inflation on economic performance in Turkey within a specified period of time. To establish the relationship between unemployment and inflation on Real Gross Domestic Product in Turkey. Design, Methodology and Approach: The Ordinary Least Squares (OLS) technique was adopted with various diagnostic tests to determine how appropriate the data is for the analysis. The study uses only OLS and Diagnostics to perform the analysis and covers only the period from 1990 to 2021. Results: The result of the diagnostic test shows that the data for the analysis is stationary at level and there are 2 cointegration equations indicating that there is a long-run relationship between GDP, Unemployment and inflation. Conclusion: Unemployment and inflation are positively related to economic growth.