The Impact of Immigration and Inflation of Unemployment in United States of America from 1989 to 2018: a VAR Approach

Dalinayodo, Vennitah (2021) The Impact of Immigration and Inflation of Unemployment in United States of America from 1989 to 2018: a VAR Approach. Final Year Project (Bachelor), Tunku Abdul Rahman University College.

Text VENNITAH DALINAYODO 18WBR07771_FYP (3).pdf Restricted to Registered users only Download (1MB)

Abstract

Unemployment is mainly known as one of the serious issue among the citizens as it is capable to influence lifestyle and downturn the economic growth of a country. United States is a well-developed country, however unemployment problem still causing many undesirable occurrences in the nation. This research paper will investigate the relationship between unemployment rate, immigration, inflation rate and global financial crisis in United States of America from 1989 to 2018, which consists of 30 observations. The key purpose of study is to identify the impact of unemployment in United States. This study have been applied various analysis tools such as Augmented Dickey Fuller Test, Lag Length Selection, VAR Block Exogeneity Test, VAR Estimates, Impulse Response Analysis and Variance Decomposition in order to evaluate the relationships among the variables. It is crucial to know based on VAR Block Exogeneity Test exposed that inflation rate and unemployment rate have unidirectional relationship in this studies. The findings of VAR estimates revealed that inflation rate and global financial crisis are causing unemployment rate in the United States but immigration does not cause unemployment to rise in United States. Additionally, Diagnostic Checking such as Breusch-Godfrey(BG) test, Breusch-Pagan-Godfrey test, Autoregressive Conditional Heteroskedasticity (ARCH) test and Normality test via using Jarque-Bera will be utilised to ensure that the model is best linear unbiased estimator (BLUE). The proper clarification and interpretation for the stated models will be delivered and empirical problems will be also addressed in this studies.