Economic Growth and Unemployment in Fiji: A Cointegration Analysis

Abstract

Fiji has been experiencing high unemployment rate since 1990s. Unemployment has become increasingly more pronounced from 2000 due to the political instability, expiry of land leases and operational problems in garment and gold industry. On the other hand, there was a surge in number of graduates following the establishment of two new universities. Additionally a sharp decline in investment in the post coup years of 2000 ensued, contributing to further increase in unemployment rate and sluggish economic growth. This paper seeks to investigate whether long run association among growth and unemployment is relevant for Fiji for the period 1982-2012. Johansen Cointegration test procedure has been applied to ascertain the assocaition among growth, investment and unemployment. Result confirmed the evidence of long-run association among unemployment and growth, with cointegration running from investment and unemployment to increase in economic output. Economic policies should gear towards improving investment.

Keywords: Fiji, Unemployment, economic growth, investmnent


Article Review Status: Published

Pages: 49-60 (Download PDF)

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