engleski

Prices, employment and gross domestic product in Ex-Yugoslav countries: A panel cointegration analysis

Inflation, (un)employment and real output developments exert a significant influence on a country’s economy for which they are often called ‘The three pillars of the economy’. Empirical (i)regularity between national output and unemployment known as Okun’s law and a nexus between unemployment and inflation known as the Phillips curve, belong to the frame of monoeconomics for they are considered to be a universal relationships applicable in all countries and economic conditions. Though they have a Keynesian background, these linkages are accepted as a part of the orthodox economics and neoclassical synthesis. With a mainstream background, they became of the most interesting scientific topics in the 20th century. Understanding more about these economic phenomena under a rising global integration and dynamic macroeconomic adjustment processes has become an increasingly critical issue. In that manner, this study explores empirical relationship between prices, employment and gross domestic output in the ex-Yugoslav countries. Empirical research is based on panel cointegration analysis that utilizes annual data on consumer price index, employment and real gross domestic product from 2000 to 2015. On the whole, the causal relationship of prices and employment to real GDP appear to be consistent in the short and long-run across the panel, suggesting limited possibility of trade-off policy.

prices, employment, real gross domestic product, ex-Yugoslav countries, panel cointegration analysis, short/long-run

Publikacija je financirana od strane Hrvatske zaklade za znanost. This work has been fully supported by the Croatian Science Foundation under the project number 9481 Modelling Economic Growth - Advanced Sequencing and Forecasting Algorithm. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of Croatian Science Foundation.