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Uma Aplicação da Lei de Okun em Portugal

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Author Info
João Sousa Andrade () (GEMF and Faculdade de Economia, Universidade de Coimbra)

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Abstract

We know from experience that weak economic growth increases the unemployment rate. In 1962 Okun proposed to measure potential output in terms of unemployment gap. From this relation a direct link between increase in unemployment and output growth was deduced, known as the Okun Law. This Law is one of the pillars of empirical macroeconomics. One of the problems of this Law is the iteration between the variables involved and the non-stationarity of these variables. As a consequence we must be careful with the stability and the possible asymmetry of Okun’s Law. We apply these ideas to the Portuguese economy in order to obtain an estimated Okun Law. We can conclude by the temporal stability of a dynamic formulation of the Law, although we also conclude by the presence of an asymmetric behaviour of the Law.

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Publisher Info
Paper provided by GEMF - Faculdade de Economia, Universidade de Coimbra in its series GEMF Working Papers with number 2007-04.

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Length: 39 pages
Date of creation: 2007
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Handle: RePEc:gmf:wpaper:2007-04

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Related research
Keywords: Okun Law; Cycles; Participation rate; Stability; Asymmetry;

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Find related papers by JEL classification:
C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions
C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution

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    Other versions:
  3. D. T. Nguyen & A. Mahinda Siriwardana, 1988. "The Relationship Between Output Growth and Unemployment: A Re-examination of Okun's Law in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 21(1), pages 16-27. [Downloadable!] (restricted)
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    Other versions:
  5. Allan D. Brunner, 1997. "On The Dynamic Properties Of Asymmetric Models Of Real Gnp," The Review of Economics and Statistics, MIT Press, vol. 79(2), pages 321-352, May. [Downloadable!] (restricted)
    Other versions:
  6. David Altig & Terry J. Fitzgerald & Peter Rupert, 1997. "Okun's law revisited: should we worry about low unemployment?," Economic Commentary, Federal Reserve Bank of Cleveland, issue May 15. [Downloadable!]
  7. Lee, Jim, 2000. "The Robustness of Okun's Law: Evidence from OECD Countries," Journal of Macroeconomics, Elsevier, vol. 22(2), pages 331-356, April. [Downloadable!] (restricted)
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    Other versions:
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  14. Gomme, Paul, 1999. "Shirking, Unemployment and Aggregate Fluctuations," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(1), pages 3-21, February.
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    Other versions:
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