The effects of monetary policy on unemployment in Namibia

Tafirenyika SUNDE

Abstract


Abstract. The main purpose of the article was to establish the effects of monetary policy on unemployment in Namibia. The article used the structural VAR methodology in a macroeconometric setting to achieve this. The results show that monetary policy affects unemployment in Namibia in the short run and in the long run, it is ineffective. These results differ from the results by Alexius & Holmlund (2007) and Jacobs et al. (2003) who found that monetary policy has a significant role to play in explaining unemployment in both the short run and the long run. This means that there is still need to investigate the other explanations of long run unemployment in Namibia such as the demand and supply related variables so that appropriate policies are propounded to address it effectively.

Keywords. Unemployment, Structural VAR, Impulse response, Variance decomposition, Namibia, Macroeconometric modelling.

JEL. E52, J64.


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DOI: http://dx.doi.org/10.1453/jest.v2i4.531

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