THE IMPACT OF FINANCIAL DEVELOPMENT AND UNEMPLOYMENT ON POVERTY RATE IN THE CONTEXT OF DIGITAL ECONOMY IN UZBEKISTAN

Abstract

The aim of this paper is to analyze the impact of financial development index and unemployment rate on poverty rate in Uzbekistan in the context of digital economy. To reach this aim, data covering the period 2000-2021 years was analyzed using correlation analysis and applying Vector Autoregressive (VAR) model. It was revealed that there is a negative association between poverty and financial development as well as poverty and unemployment rate. VAR model showed that in Uzbekistan lags of poverty serve to the increase of the current level of poverty. It was found that financial development does not affect the poverty rate. To analyze the individual effects of variables on poverty, the Granger causality test was conducted, which showed that there is a uni-directional relationship between poverty and unemployment rate. It was revealed that poverty causes the decrease in unemployment rate. As regards the relationship between poverty and financial development, it had a bi-directional character.