The study aims to measure the effect of the real effective exchange rate on unemployment in Egypt for the period and also to determine whether the relationship is direct or inverse, due to the existence of a dispute between studies on this relationship. Hence, the study hypothesis is that there is a negative relationship in the long and short run between the effective real exchange rate and unemployment in Egypt. The study used in the previous hypothesis test the Autoregressive Distributed Lag

more »

... ARDL) model for Cointegration and the bound test to test for a long-run relationship because it was found that the dependent variable, which is unemployment, stationary at the first difference I(1), and that all independent variables are stationary at the level I(0), Then, measure the short-run relationships using the ARDL-ECM model. The study concluded that the effective real exchange rate has a negative and significant effect on unemployment in the long term in Egypt. There is also a negative and significant relationship between unemployment, growth, real interest rate and fixed capital growth rate, while the effect of economic openness on unemployment was positive and significant. That is, The results proved the validity of the study hypothesis completely.