THE EFFECTS OF INFLATION RATE AND INVESTMENT RATE TOWARD UNEMPLOYMENT IN UZBEKISTAN
DOI:
https://doi.org/10.5281/zenodo.17443557Keywords:
inflation, investment, unemployment, ARDL model, economic growth, labor market, monetary policy.Abstract
This study examines how Uzbekistan's unemployment rate is impacted by investment and inflation rates
between 2000–2024. Designing successful labor market strategies requires an awareness of these relationships,
particularly in a transitioning economy like Uzbekistan, where external shocks and structural reforms constantly impact
macroeconomic dynamics. Two important variables that are frequently examined in economic theory for their potential
effects on employment levels are inflation and investment; however, there is currently little empirical research specifc to
Uzbekistan.
Using annual data collected from reputable sources such as the World Bank, International Monetary Fund (IMF), and the
State Committee of the Republic of Uzbekistan on Statistics, this research applies the Autoregressive Distributed Lag
(ARDL) bounds testing approach. This method is particularly suitable given the small sample size and the presence of
mixed integration orders among the variables. The model is designed to explore both short-term and long-term dynamics,
providing a comprehensive view of how inflation and investment influence unemployment trends over time.
The results have important policy implications. For Uzbekistan to maintain and enhance employment levels, the
government should prioritize policies that attract and sustain both domestic and foreign investments. Simultaneously,
maintaining moderate inflation through sound monetary policies remains important to support aggregate demand without
triggering macroeconomic instability
References
Blanchard, O. (2017). Macroeconomics. Pearson.
Friedman, M. (1968). “The Role of Monetary Policy,” American Economic Review, 58(1), 1–17.
Phillips, A. W. (1958). “The Relation between Unemployment and the Rate of Change of Money Wage Rates in the
United Kingdom,” Economica, 25(100), 283–299.
World Bank (2024). Uzbekistan Economic Update.
International Monetary Fund (2024). World Economic Outlook Database.
State Committee of the Republic of Uzbekistan on Statistics (2024). Labor Market Statistics.
Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). “Bounds Testing Approaches to the Analysis of Level Relationships,”
Journal of Applied Econometrics, 16(3), 289–326.
Gujarati, D. N. (2011). Econometrics by Example. Palgrave Macmillan.
Central Bank of Uzbekistan (2024). Monetary Policy Report.
