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Abstract:
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Unemployment and Inflation occurs to be one of the most extremely discussed indicators in Saudi Arabia thus; the information about these two variables is always irritably expected, analyzed and commented not only by economists but also benign an interesting by the statistician. The main objective of this study is applied a time series modeling techniques to study the relationship between the rate of unemployment and inflation in Saudi Arabia. Furthermore, annual time series data has been used in this study for the period of 2000 to 2018, and all statistical data was obtained from Saudi Arabian Monetary Agency and General Authority for Statistics. From a statistical point, Autoregressive time series model is applied to estimate the relationship between the rate of unemployment and inflation. In the findings of this study, the analyses establish that there is a significant negative relationship between unemployment and inflation rates. The conclusion is important for stating an optimal inflation target and therefore obtaining a natural unemployment rate. Also, these results have important for the decision-makers for explanation of policies focusing on inflation and unemployment.
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