An Understanding of How GDP, Unemployment and Inflation Interact and Change across Time and Frequency

The main aim of this paper is to examine the dynamic relationship between three pillars economy: unemployment, inflation, and GDP in Ethiopia using cross-wavelet transform (XWT) analysis, multivariate Student-t generalized autoregressive score (GAS) model, distributed lag (ARDL) model. dynamics indicators were also investigated Toda–Yamamoto (TY) causality test. empirical findings from XWT method suggest a GDP, though varies over time frequency. estimation results GAS model show that correlation unemployment (overall, male, female, youth) inflation highly significant, indicating dynamic. A exists except for females young people. ARDL approach’s showed significantly negatively impacted GDP. However, it was found increased general conclusion drawn study’s affects inflation. Therefore, government should aggressively implement policies reduce especially youth unemployment. Additionally, administration must rehabilitate country’s badly damaged economy formalize lasting cessation hostilities federal Tigray People’s Liberation Front (TPLF).