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19702009

Abstract

The objective of this study, is to build simultaneous model that links economic polices.

The model is composed of five functions i.e. public sector wages, production, generalprice level, demand for labor and monetary policy. Public sector wages represent income

policy, production represents macroeconomic policy, demand for labor is represented by

labor force, and monetary policy is represented by money supply. To achieve the goals

Three Stages Least Squares was used via EViews to estimate the model. Estimates are

consistent with economic theories. It is recommended paying more attention the problem

of unemployment due ti its adverse effects, linking the increase of wages with increased

productivity, financing increases in wages from true resources, minimum wage must be

linked to the expenditure on living, to avoid the problems of inflation, which lead to theloss of the real value of wage, and finally support of the Supreme Council of Wages, with

the capacities and scientific and technical qualified persons, on the assumption that it is

the only tool, for setting comprehensive policies, which are table and fair for wages, in

both the public and private sectors, with observing the economic, social and financialfactors, in the state.

Key Words: Wage, Production, Inflation, Demand for Labor, Unemployment,

Economic Policies ! " #$ ! &% ' ( ! )* % + %

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$#"! System: SYS01

Estimation Method: Three-Stage Least Squares

Date: 05/08/12 Time: 12:2Sam!"e: 1#$0 200$

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Convergence achieved after: 1 weight matrix, 46 total coef iterationsCoefficient Std. Error t-Statistic Prob.

C(4) 14.19804 3.96007 3.5853 0.0005C(7) 0.068339 0.013065 5.230848 0C(5) 0.996844 0.025201 39.55597 0Equation: P=[AR(1)=C(5)]+C(4)*Y+C(7)*CHP1Observations: 35

R-squared 0.989753Mean dependent

var 78055.01Adjusted R-squared 0.989113 S.D. dependent var 133093.6

S.E. of regression 13887.24 Sum squared resid 6.17E+09Durbin-Watson stat 1.780547

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Sample: 1970 2007Included observations: 38

Total system (unbalanced) observations 165Convergence achieved after: 1 weight matrix, 46 total coef iterations

Coefficient Std. Error t-Statistic Prob.C(8) 259.6497 90.74943 2.861171 0.0048C(9) 0.568008 0.096959 5.858233 0C(10) 0.705294 0.089451 7.884673 0Equation: Y=C(8)*LABF+C(9)*INV+C(10)*Y(-1)Observations: 28

R-squared 0.978205

Mean dependent

var 7384.386Adjusted R-squared 0.976461 S.D. dependent var 2133.303S.E. of regression 327.3 Sum squared resid 2678132Durbin-Watson stat 1.450733

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System: SYS01Estimation Method: Three-Stage Least SquaresDate: 05/08/12 Time: 12:32Sample: 1970 2007Included observations: 38

Total system (unbalanced) observations 165Convergence achieved after: 1 weight matrix, 46 total coef iterationsCoefficient Std. Error t-Statistic Prob.

C(11) 2.386881 0.719615 3.316887 0.0011C(12) -0.00157 0.00054 -2.90962 0.0042C(13) 0.123703 0.035659 3.469019 0.0007C(14) 2.72E-06 1.25E-06 2.169139 0.0317C(17) 0.794775 0.069293 11.46982 0

Equation:

LABF=C(11)+C(12)*Y/LABF+C(13)*D9+C(14)*CHP1/LABF+C(17)*labf(-1)

R-squared 0.987976Mean dependent

var 7.219988Adjusted R-squared 0.986373 S.D. dependent var 2.165711S.E. of regression 0.25281 Sum squared resid 1.917393Durbin-Watson stat 2.166507

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[ISSN 1858-6139]University of Bakht Alruda Scientific Journal Issue No. 8 Sep 2013

F.$#"!

Date: 05/08/12 Time: 08:12

Sample: 1970 2007Included observations: 27

Test assumption: Linear deterministic trend in the data

Series: CHP1 P U

Lags interval: 1 to 1

Likelihood 5 Percent 1 Percent Hypothesized

Eigenvalue Ratio Critical Value Critical Value No. of CE(s)

0.949733 126.8115 29.68 35.65 None **

0.792282 46.07054 15.41 20.04 At most 1 **0.126061 3.638104 3.76 6.65 At most 2

*(**) denotes rejection of the hypothesis at 5%(1%) significance level

L.R. test indicates 2 cointegrating equation(s) at 5% significance level

!

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0.319207 18.91058 15.41 20.04 None *

0.144275 5.453197 3.76 6.65 At most 1 *

*(**) denotes rejection of the hypothesis at 5%(1%) significance level

L.R. test indicates 2 cointegrating equation(s) at 5% significance level A 5"BDate: 05/08/12 Time: 08:40

Sample: 1970 2007

Included observations: 34

Test assumption: Linear deterministic trend in the dataSeries: LABF Y D9 CHP1

Lags interval: 1 to 1

Likelihood 5 Percent 1 Percent Hypothesized

Eigenvalue Ratio Critical Value Critical Value No. of CE(s)

0.704502 73.57680 47.21 54.46 None **

0.464497 32.12764 29.68 35.65 At most 1 *

0.265075 10.89300 15.41 20.04 At most 20.012319 0.421439 3.76 6.65 At most 3

*(**) denotes rejection of the hypothesis at 5%(1%) significance level

L.R. test indicates 2 cointegrating equation(s) at 5% significance level & A"& B!CDate: 05/08/12 Time: 08:47Sample: 1970 2007Included observations: 36

Test assumption: Linear deterministic trend in the data

Series: MS CHP1 X

Lags interval: 1 to 1

Likelihood 5 Percent 1 Percent Hypothesized

Eigenvalue Ratio Critical Value Critical Value No. of CE(s)

0.958786 146.0432 29.68 35.65 None **

0.572768 31.23967 15.41 20.04 At most 1 **

0.017191 0.624272 3.76 6.65 At most 2

*(**) denotes rejection of the hypothesis at 5%(1%) significance level

L.R. test indicates 2 cointegrating equation(s) at 5% significance level