Cheratian, Iman Farzanegan, Mohammad Reza Goltabar, Saleh
MAGKS Joint Discussion Paper Series in Economics No. 31-2019
We examine the effects of oil price shocks on unemployment rates in the MENA oil-exporting and oil-importing countries over the period 1991-2017. Using the nonlinear autoregressive distributed lag (NARDL) model, the results show that in the short-run, the positive changes of oil prices only exert a positive (increasing) impact on the unemployment rate for oil-exporting countries. However, in the long-run, positive changes in oil prices have a significant increasing effect on the unemployment rate for oil-exporting and oil-importing countries in the MENA region. We also find that the negative changes in oil prices do not show a significant effect on the unemployment rate. Our findings are in line with predictions of the Dutch disease hypothesis.
Oil price shocks Unemployment rate MENA region NARDL