International Journal of Applied Research
Vol. 6, Issue 3, Part E (2020)
Augmented phillips curve with trade openness: Cointegration relationship in democratic republic of Congo
This study aims at analyzing the relationship between unemployment and trade openness in the Democratic Republic of Congo (DRC) within the framework of augmented Phillips curve. Use is made of cointegrating vector autoregressive (VAR) to this end. Quarterly data are used covering the period 1995 to 2017. The results of the analysis show that there exists a cointegrating or negative equilibrium long-run relationship between unemployment and trade openness in the DRC when controlling for inflation in the context of the traditional Phillips curve. This implies that trade openness may reduce unemployment in the DRC, certainly through technological and skill transfer that are beneficial for human capital and labor productivity. This finding shows the benefit of the economic integration of the DRC and supports the current policy of the DRC’s government to participate in the different regional, continental and global free trade agreements.
How to cite this article:
David Masamba Famode. Augmented phillips curve with trade openness: Cointegration relationship in democratic republic of Congo. Int J Appl Res 2020;6(3):272-276.