The Relationship between Unemployment and Economic Growth Rate in Arab Country

Abstract

The main purpose of this paper is to examine the relationship between unemployment and GDP growth in Arab countries. We consider 9 Arab Countries between 1994 and 2010. The model adopted for testing the relationship is the Pooled EGLS (Cross-section SUR). It has been found that economic growth has negative and significant effect upon the unemployment rate it means that 1% increase in economic Growth will decrease the unemployment rate by 0.16%..

Keywords: Economic growth, Unemployment, GDP, Okun’s law, panel, Arab countries.