International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

The Relationship between GDP and Unemployment Rate in the U.S.
Dr. Claudius Mandel, Peter Liebens

Gross Domestic Product (GDP) and unemployment rate are two key figures to determine a country’s degree of prosperity. High unemployment rate shows that the labor availability is not used efficiently. This paper observes the correlation between the Gross Domestic Product and the unemployment rate in the U.S. - over a long period of time, i.e. 50 years. By using an econometric model we run multiple regression analysis to test our hypothesis that is that a decreasing GDP rate through slow economic growth leads to an increasing unemployment rate. Supported by a review of relevant literature we discover a continuously existing negative correlation between the GDP and the unemployment in the U.S. over the last fifty years.

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