The study aimed to investigate the trends of industrial policy indicators and economic development in Yemen, represented by industrial exports, investment-to-GDP ratio, unemployment rate, and inflation rate. Additionally, it sought to measure the impact of industrial variables, specifically industrial exports and investment-to-GDP ratio, on economic development, which includes GDP, unemployment rate, and inflation rate, in the presence of money supply as a mediating variable. The research adopted a descriptive approach through the use of ratios and growth rates while also adopting an analytical approach using structural equation modeling (Path Analysis) to assess the impact of industrial policy represented by industrial exports and investment-to-GDP ratio as external variables on economic development represented by GDP, unemployment rate, and inflation rate with money supply as a mediating variable.The study yielded several findings, the most significant being: There exists an indirect statistically significant impact of industrial policy indicators, namely industrial exports and investment-to-GDP ratio, on economic development as represented by GDP in the context of money supply as a mediating variable. Conversely, there was no indirect statistically significant impact of these industrial policy indicators on economic development concerning the unemployment rate in the presence of money supply as a mediating variable. The study also indicated a direct inverse relationship between investment as a percentage of GDP, which is considered an external variable, money supply as a mediating variable, and the unemployment rate as an internal variable. Hence, this suggests that investment has not contributed to real change over the past decade, as unemployment rates remain high. Furthermore, there was a positive direct impact with statistical significance of industrial policy indicators, specifically investment as a percentage of GDP, on economic development represented by GDP in the context of money supply as a mediating variable | :Key Words· Gross Domestic Product (GDP)· Money supply· Unemployment rate· Inflation rate· Industrial exports· Investment-to-GDP ratio Path analysis |
