Examining the Effects of Inflation and Unemployment on Economic Growth in Iran (1996-2012)

The present study examined the role of inflation and unemployment on economic growth from 1996 to 2012. In this study, the effect of inflation and unemployment on economic growth in two short-term and long-term phases was investigated and examined using Autoregressive Distributed Lag (ARDL) Model. Microfit version 4.0 and Eviews version 6.0 were used for model estimation. Model estimation results showed the significant and negative effect of inflation and unemployment on economic growth in long term, which indicated that inflation and unemployment decreased economic growth in long term. This issue revealed that authorities should diligently endeavor and plan to reduce and control inflation and unemployment. The results of this study can be used by all respected authorities in Iran, especially authorities of economic and social institutions, so that they could attempt to reduce and control unemployment and inflation in order to achieve economic growth