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A Nonlinear Relationship: Unemployment and Economic Growth (Construction Sector) in Spain, 1995.1–2012.2

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  • Eduardo Loría
  • Emmanuel Salas

Abstract

A quadratic version of the first-difference Okun’s Law model was estimated for Spain (1995.Q1-2012.Q2). An accelerationist version of Okun’s Law was obtained, which allowed us to calculate variable Okun coefficients as well as critical points in the relationship between construction sector growth and the variation in overall unemployment. The optimal economic growth rate was determined to be 7.38 %. By applying principal components, it is demonstrated that this sector led the economic process after 1995. Copyright International Atlantic Economic Society 2014

Suggested Citation

  • Eduardo Loría & Emmanuel Salas, 2014. "A Nonlinear Relationship: Unemployment and Economic Growth (Construction Sector) in Spain, 1995.1–2012.2," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 20(4), pages 439-453, November.
    • Handle: RePEc:kap:iaecre:v:20:y:2014:i:4:p:439-453:10.1007/s11294-014-9496-6
    DOI: 10.1007/s11294-014-9496-6
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    2. Mahmoud Kraim & Tamat Sarmidi & Fathin Faizah & Norlin Khalid, 2023. "A sectoral specification of Okun’s law in oil-producing countries: evidence from panel ARDL model," Economic Change and Restructuring, Springer, vol. 56(4), pages 2385-2404, August.

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    More about this item

    Keywords

    Spain; First-difference Okun’s Law (accelerationist version); Variable Okun coefficients; Quadratic function; Unemployment; Construction sector; C52; E24; L74;
    All these keywords.

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction

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