The relationship between unemployment and macroeconomic indicators

Institute of Technology and Business in České Budějovice, School of Expertness and Valuation Okruzni 517/10, 37001 Ceske Budejovice, Czech Republic

^* Corresponding author: kalinova@mail.vstecb.cz

Abstract

The issue of unemployment set in the context of economic development is a crucial issue for ensuring economic growth of a country. The aim of the text is to analyze the relationship between unemployment and basic macroeconomic indicators and to confirm the direct relationship between these variables. The research method used was the analysis of the values of the general unemployment rate, gross domestic product, i.e. GDP, and gross value added, i.e. GVA, and their subsequent comparison. Other research methods include correlation analysis with Pearson’s correlation coefficient, which confirmed a high degree of correlation between the general unemployment rate and the values of GDP and GVA. The research confirmed the existence of a correlation between the general unemployment rate and both GDP and GVA. GDP and GVA in the Moravian-Silesian Region were increasing in the sample years 2013-2019, while the general unemployment rate was decreasing. The analysis of the values shows that the values of GDP and GVA were inversely proportional to the values of the general unemployment rate. A limitation of the research was that economic development is not only influenced by the unemployment rate. As a result, it was not possible to establish a precise value that would define the extent of the impact of unemployment on the economic development of the region. The contribution of the paper is the confirmation of the existence of the correlation of unemployment with the mentioned development indicators, and the validity of Okun’s Law also on the territory of the Moravian-Silesian Region.