Abstract:

The purpose of this study is to investigate the relationship between the selected key macroeconomic variables and unemployment, and the role of the covid-19 pandemic in this relationship for Turkey. To that end, the relationship between economic growth, trade openness, foreign direct investments, and unemployment is examined with quarterly data for the first quarter of 2006 and the second quarter of 2020. In addition to the long-term relationship between the variables, the coefficient estimates of the interactive dummy variables for the pandemic period are analyzed using the ARDL bounds test method. Based on the results, there is only a relationship exists between unemployment and economic growth, and economic growth increases unemployment in the long run. Therefore, Okun's law is invalid in Turkey. On the other hand, it is also determined that growth has rising effect, foreign direct investment and trade openness have a dampening effect on the unemployment in covid-19 period. During the period, the covid-19 alone increases unemployment.

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