VAR ESTIMATION OF INDUSTRIAL PRODUCTION, UNEMPLOYMENT AND SPREAD FOR THE ARMENIAN ECONOMY

Abstract

In the context of macroeconomic and financial system policies it is of high importance to have models encapsulating interactions between the real economy and the financial system. In particular, the process of constructing such a model is described within this paper. For that purpose, a VAR model of industrial production, unemployment and loan-deposit interest rate spread is used. The most notable finding of the research is that spread considerably influences both output and employment in the long run.