Okun's law revisited. Is there structural unemployment in developed countries?
AbstractOkun's law for the biggest developed countries is re-estimated using the most recent data on real GDP per capita and the rate of unemployment. Our results show that the change in unemployment rate can be predicted with a high accuracy. The link needs the introduction of a structural break which might be caused by the change in monetary policy or/and in measurement units. Statistically, the link between the studied variables is characterized by the coefficient of determination between 0.40 (Australia) and 0.84 (the USA). The residual errors can be associated with measurement errors. The obtained results suggest the absence of structural unemployment in the studied developed countries.
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Bibliographic InfoPaper provided by arXiv.org in its series Papers with number 1109.4383.
Date of creation: Jul 2011
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Web page: http://arxiv.org/
Other versions of this item:
- Kitov, Ivan, 2011. "Okun’s law revisited. Is there structural unemployment in developed countries?," MPRA Paper 32135, University Library of Munich, Germany.
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-01 (All new papers)
- NEP-LAB-2011-10-01 (Labour Economics)
- NEP-MAC-2011-10-01 (Macroeconomics)
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