Yusra Salim Nayyf, Zena Tariq Ali, Bilal Abdulhaq Abdul Kareem
The study aimed to assess the extent to which the development of the financial sector contributed to reducing unemployment in Chile during the period (1991-2017) by using Johanssen for the joint integration procedure, which results from the error correction model. Moreover, the elasticities in the short and long term were estimated, and the results revealed the existence of a complementary relationship. The long-term relationship between the variables of the model and the value of the error correction factor was (-0.024). When estimating the elasticities, the relationship in the short term was for two variables, namely (LnX1) and (LnX3), which express the domestic credit provided to the private sector (GDP%) and the market value of local companies. Listed (% GDP), respectively, is negative in unemployment, that is, they cause an increase in the unemployment rate, while the variable (LnX2), which expresses the money supply in a broad sense (% of GDP), was positive in reducing unemployment, but in the long term it became two variables, namely (LnX) and (LnX3) have a positive effect in reducing unemployment, and the diagnostic tests showed that the model is devoid of any standard problem. Providing objective conditions for economic growth.