International Journal of

ADVANCED AND APPLIED SCIENCES

EISSN: 2313-3724, Print ISSN: 2313-626X

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 Volume 9, Issue 7 (July 2022), Pages: 9-15

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 Original Research Paper

 Does COVID-19 affect GDP? A relationship between GDP and unemployment rate

 Author(s): Siti Sarah Januri *, Zaitul Anna Melisa Md Yasin, Noryanti Nasir, Isnewati Ab Malek

 Affiliation(s):

 Faculty of Computer and Mathematical Sciences, Universiti Teknologi MARA, Cawangan Negeri Sembilan, Kampus Seremban, Negeri Sembilan, Malaysia

  Full Text - PDF          XML

 * Corresponding Author. 

  Corresponding author's ORCID profile: https://orcid.org/0000-0001-7098-6387

 Digital Object Identifier: 

 https://doi.org/10.21833/ijaas.2022.07.002

 Abstract:

This study aims to examine the long-term relationship between the unemployment rate and the growth of domestic product (GDP) in Malaysia, thereby revealing unemployment's impact on GDP. In this COVID-19 pandemic situation, numerous people have lost their jobs. That indirectly increases the unemployment rate which later has a variety of negative consequences on the government, society, and individuals. The Malaysian government has taken a big step in announcing the Movement Control Order (MCO) to slow down the spread of infections. Such decisions have affected the unemployment rate, as some businesses have to reduce their employees and some high-risk companies temporarily closed to stop the spreading of COVID cases. The cointegration test is employed to identify the relationship between the unemployment rate and GDP and then validate it by analyzing the error. Quarterly unemployment rate and GDP data were obtained from the Department of Statistics Malaysia (DOSM) website from the first quarter of 2010 to the fourth quarter of 2020. The study found that the variables were stationary at first differencing and long-run relationships existed among them. According to the empirical findings in this study, long-run and short-run unemployment rates have a high influence on the GDP rate. However, the result contradicted one work in literature that claimed a negative association between GDP and unemployment for the past fifty years. This could have occurred as a result of the worldwide COVID-19 pandemic.

 © 2022 The Authors. Published by IASE.

 This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

 Keywords: GDP, Unemployment rate, COVID-19, Cointegration test, Error correction model

 Article History: Received 2 December 2021, Received in revised form 3 March 2022, Accepted 13 April 2022

 Acknowledgment 

This research was supported by Universiti Teknologi MARA (UiTM) and funded under UiTM internal Grant No. 600-RMC/LESTARI COVID/5/3 (042/2020). This support is gratefully acknowledged. The authors would like to thank other researchers, lecturers, and friends for their ideas and discussion.

 Compliance with ethical standards

 Conflict of interest: The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

 Citation:

 Januri SS, Yasin ZAMM, and Nasir N et al. (2022). Does COVID-19 affect GDP? A relationship between GDP and unemployment rate. International Journal of Advanced and Applied Sciences, 9(7): 9-15

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 Figures

 Fig. 1 Fig. 2 Fig. 3 

 Tables

 Table 1 Table 2 Table 3 Table 4 

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