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The robustness of Okun's law in Spain, 1980-2004: Regional evidence

Listed author(s):
  • Villaverde, José
  • Maza, Adolfo

The purpose of this paper is to analyse Okun's law for the Spanish regions over the period 1980-2004. Based on its "gap" specification, the results show that an inverse relationship between unemployment and output holds for most of the regions and for the whole country. However, the quantitative values of Okun's coefficients are quite different, a result that is partially explained by regional disparities in productivity growth. These differences imply that, when it comes to policy issues, conventional aggregate demand/supply management policies should be combined with region-specific policies.

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File URL: http://www.sciencedirect.com/science/article/pii/S0161-8938(08)00075-6
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Article provided by Elsevier in its journal Journal of Policy Modeling.

Volume (Year): 31 (2009)
Issue (Month): 2 ()
Pages: 289-297

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Handle: RePEc:eee:jpolmo:v:31:y:2009:i:2:p:289-297
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505735

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  1. Bajo-Rubio, Oscar & Diaz-Roldan, Carmen & Esteve, Vicente, 2007. "Change of regime and Phillips curve stability: The case of Spain, 1964-2002," Journal of Policy Modeling, Elsevier, vol. 29(3), pages 453-462.
  2. repec:kap:iaecre:v:6:y:2000:i:3:p:557-570 is not listed on IDEAS
  3. Robert J. Gordon, 1984. "Unemployment and Potential Output in the 1980s," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 15(2), pages 537-568.
  4. Dreger, Christian & Marcellino, Massimiliano, 2007. "A macroeconometric model for the Euro economy," Journal of Policy Modeling, Elsevier, vol. 29(1), pages 1-13.
  5. Kwami Adanu, 2005. "A cross-province comparison of Okun's coefficient for Canada," Applied Economics, Taylor & Francis Journals, vol. 37(5), pages 561-570.
  6. Donald Freeman, 2000. "Regional tests of Okun's law," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 6(3), pages 557-570, August.
  7. Prachowny, Martin F J, 1993. "Okun's Law: Theoretical Foundations and Revised Estimates," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 331-336, May.
  8. Dimitris Christopoulos, 2004. "The relationship between output and unemployment: Evidence from Greek regions," Economics of Governance, Springer, vol. 83(3), pages 611-620, 07.
  9. Moosa, Imad A., 1997. "A Cross-Country Comparison of Okun's Coefficient," Journal of Comparative Economics, Elsevier, vol. 24(3), pages 335-356, June.
  10. Brian Silverstone & Richard Harris, 2001. "Testing for asymmetry in Okun's law: A cross-country comparison," Economics Bulletin, AccessEcon, vol. 5(2), pages 1-13.
  11. Maza, Adolfo & Villaverde, Jose, 2007. "A state-space approach to the analysis of economic shocks in Spain," Journal of Policy Modeling, Elsevier, vol. 29(1), pages 55-63.
  12. Mauro, Luciano, 2004. "The macroeconomics of Italy: a regional perspective," Journal of Policy Modeling, Elsevier, vol. 26(8-9), pages 927-944, December.
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