In The Long Run, The Rate Of Unemployment In Canada Will Be Growing. A Four Year Update

One can suggest that the rate of unemployment has been driven by real economic growth and there is no much room for other macroeconomic variable to intervene. Currently, Canada need approximately 1% per year increase in GDP per capita in order unemployment to fall. Otherwise, it will be growing as it was in 2015 and 2016. With decaying economic growth, as described in this post, the rate of unemployment will be growing in Canada.

 

Figure 1. The observed and predicted rate of unemployment in the Canada between 1970 and 2016.

 

Figure 2. The measured time series is regressed against the predicted one. R2=0.87 with both time series likely to be stationary.

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