Unemployment Rate in Greece: “The” Long Run Macroeconomic ChallengeProperties

In this report, after presenting some key structural characteristics of the Greek unemployment rate (age, gender, long term unemployment share) and the employment share in ten major sectors of production, we investigate how key macroeconomic variables - real GDP, real interest rate and real credit to firms - are statistically related with changes in the unemployment rate. Our econometric results reveal a negative (and statistically significant) relation with real GDP and real credit to firms’ growth, as well as a positive relation with real interest rate changes. Furthermore, we find a negative (and statistically significant) relation between changes in the unemployment rate on the one hand, and changes in prices’ expectations and wealth of households on the other hand.