Macroeconomic Determinants of Unemployment in Brazil: An ARDL Approach

Abstract

Brazilian society today faces a serious macroeconomic problem that is the high rate of unemployment. With persistent stagnation of growth, it is concluded that the resumption of jobs will not be something verifiable in the short term, requiring actions that can boost the growth of the product with the improvement of the business environment. The purpose of this paper is to analyze empirically the long-term relationships between aggregate unemployment, monetary policy instruments, exports and direct investments in the country. For this, the econometric strategy used is the approach by ARDL models with causality test developed by Toda and Yamamoto. The results reveal the importance of monetary policy instruments for the job creation environment where percent increases in the level of national activities, inflation and exports lead to reduction of unemployment and also reveal that the direct investments made in the did not contribute to the generation of workplaces. There is evidence that dynamic shocks in the labor market take 4 - 7 months to return to equilibrium unemployment levels.