THE RELATIONSHIP BETWEEN MONEY SUPPLY, FINANCIAL DEVELOPMENT AND UNEMPLOYMENT: EVIDENCE FROM UPPER MIDDLE-INCOME COUNTRIES

Abstract

In macroeconomic policy, loans to the private sector can help businesses in a variety of ways, such as providing access to capital, financing new investment and job creation. However, preventing businesses from over-indebtedness is essential as it can make them more vulnerable to financial shocks. However, with upward trajectory of financial globalization in macroeconomic policy, loans to the private sector can help businesses in a variety of ways, such as providing access to capital, financing new investment and job creation. However, preventing businesses from over-indebtedness is essential as it can make them more vulnerable to financial shocks. However, the upward trajectory of financial globalization in recent times has led to a significant expansion in the financial industry. This research investigates the interdependence of money supply, financial progress, and unemployment for the period 1990-2021 by evaluating panel information covering eight economies classified as upper middle income. According to the results of the long-term CCEMG/AMG for the effect of explanatory variables on unemployment, financial development decreases unemployment and money supply increases. The country group studied is very similar to the high-income group and this particular aspect has not been investigated for this country group before, making the findings of the study new.