ABSTRACT
This chapter aims to reveal the short-run and long-run relationships between unemployment, urbanization, inflation, and economic growth for Turkey, and to determine the direction of causality between the variables. Moreover, it is an example of a statistical approach that can be used in urbanization studies, the Auto Regressive Distributed Lag Bounds Test approach, which shows the mentioned variables are cointegrated, which is used in this study to reveal the long-run relationship between variables. The long-run regression shows that a 1% increase in urbanization increases the unemployment rate by 0.73%, while a 1% increase in inflation and economic growth decreases unemployment by 0.45% and 2.88%, respectively. Moreover, according to the error correction model results, when the equilibrium between unemployment, urbanization, inflation, and economic growth deteriorates, it reaches equilibrium after about 2.26 years. Lastly, the Toda–Yamamoto causality test indicates that no causality relationship was found between the variables.
