{"title":"Impact of credit expansion and contraction on unemployment","authors":"Peterson Ozili, Olajide Oladipo","doi":"10.1108/ijse-12-2023-0939","DOIUrl":null,"url":null,"abstract":"<h3>Purpose</h3>\n<p>We investigate the impact of private credit expansion and contraction on the unemployment rate in Economic Community of West African States (ECOWAS) countries.</p><!--/ Abstract__block -->\n<h3>Design/methodology/approach</h3>\n<p>Credit expansion and contraction are measured using a three-level criterion. The fixed effect panel regression model was used to estimate the impact of private credit contraction and expansion on the unemployment rate in ECOWAS countries.</p><!--/ Abstract__block -->\n<h3>Findings</h3>\n<p>Private credit contraction significantly increases the unemployment rate in ECOWAS countries. Private credit expansion does not have a significant effect on the unemployment rate. Real GDP growth has a significant negative effect on the unemployment rate which supports the prediction of the Okun’s Law while the inflation rate has a positive and insignificant effect on the rate of unemployment in ECOWAS countries which contradicts the prediction of the Phillips curve.</p><!--/ Abstract__block -->\n<h3>Practical implications</h3>\n<p>Policymakers in ECOWAS countries need to be cautious when introducing policies that lead to private credit contraction as it could increase unemployment. Policymakers in ECOWAS countries should also find the “threshold” below which private credit contraction will worsen the unemployment rate and introduce policy measures to ensure that private credit contraction does not fall below the threshold.</p><!--/ Abstract__block -->\n<h3>Originality/value</h3>\n<p>The literature has not examined the factors leading to tight labor markets or unemployment in West African countries.</p><!--/ Abstract__block -->\n<h3>Peer review</h3>\n<p>The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-12-2023-0939.</p><!--/ Abstract__block -->","PeriodicalId":47714,"journal":{"name":"INTERNATIONAL JOURNAL OF SOCIAL ECONOMICS","volume":"30 1","pages":""},"PeriodicalIF":1.9000,"publicationDate":"2024-05-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"INTERNATIONAL JOURNAL OF SOCIAL ECONOMICS","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1108/ijse-12-2023-0939","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
Purpose
We investigate the impact of private credit expansion and contraction on the unemployment rate in Economic Community of West African States (ECOWAS) countries.
Design/methodology/approach
Credit expansion and contraction are measured using a three-level criterion. The fixed effect panel regression model was used to estimate the impact of private credit contraction and expansion on the unemployment rate in ECOWAS countries.
Findings
Private credit contraction significantly increases the unemployment rate in ECOWAS countries. Private credit expansion does not have a significant effect on the unemployment rate. Real GDP growth has a significant negative effect on the unemployment rate which supports the prediction of the Okun’s Law while the inflation rate has a positive and insignificant effect on the rate of unemployment in ECOWAS countries which contradicts the prediction of the Phillips curve.
Practical implications
Policymakers in ECOWAS countries need to be cautious when introducing policies that lead to private credit contraction as it could increase unemployment. Policymakers in ECOWAS countries should also find the “threshold” below which private credit contraction will worsen the unemployment rate and introduce policy measures to ensure that private credit contraction does not fall below the threshold.
Originality/value
The literature has not examined the factors leading to tight labor markets or unemployment in West African countries.
Peer review
The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-12-2023-0939.
目的我们调查了西非国家经济共同体（ECOWAS）国家私人信贷扩张和收缩对失业率的影响。采用固定效应面板回归模型来估计私人信贷收缩和扩张对西非国家经济共同体国家失业率的影响。私人信贷扩张对失业率的影响不大。实际 GDP 增长对失业率有明显的负面影响，这支持了奥肯定律的预测，而通货膨胀率对西非经共体国家的失业率有积极且不明显的影响，这与菲利普斯曲线的预测相矛盾。西非经共体国家的政策制定者还应找到私人信贷收缩会使失业率恶化的 "阈值"，并采取政策措施确保私人信贷收缩不会低于该阈值。原创性/价值相关文献尚未研究过导致西非国家劳动力市场或失业率紧张的因素。同行评议本文的同行评议记录可在以下网址查阅：https://publons.com/publon/10.1108/IJSE-12-2023-0939。
期刊介绍：
The International Journal of Social Economics publishes original and peer-reviewed theoretical and empirical research in the field of social economics. Its focus is on the examination and analysis of the interaction between economic activity, individuals and communities. Social economics focuses on the relationship between social action and economies, and examines how social and ethical norms influence the behaviour of economic agents. It is inescapably normative and focuses on needs, rather than wants or preferences, and considers the wellbeing of individuals in communities: it accepts the possibility of a common good rather than conceiving of communities as merely aggregates of individual preferences and the problems of economics as coordinating those preferences. Therefore, contributions are invited which analyse and discuss well-being, welfare, the nature of the good society, governance and social policy, social and economic justice, social and individual economic motivation, and the associated normative and ethical implications of these as they express themselves in, for example, issues concerning the environment, labour and work, education, the role of families and women, inequality and poverty, health and human development.
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