Reddito e Disoccupazione negli Stati Uniti e in Europa: 1979-1985

The present work aims at analyzing the relationship between the unemployment rate and the rate of growth of output in the seventies and the eighties, in the United States and the major four economies of the European Economic Community. The empirical analysis shows that the correlation has been rather strong for the United States, West Germany, and the United Kingdom, and weaker for France and Italy. This result, which denotes high unemployment/output rigidity in the latter two countries, is underscored by the differing responsiveness of the unemployment rate. A one-per-cent yearly increase of output induces more than a half-point reduction of the unemployment rate in the United States, in West Germany, and in the United Kingdom, but in France and Italy the reduction is negligible. Next, the relationship between the output gap and the unemployment rate is analyzed, and it is shown that in the United States the output gap created in 1980-82 has since been narrowed. This reduction has been associated with the fail in the unemployment rate from its peak in 1982. By contrast, output gap has not been reduced in the European economies, and a further increase in their unemployment rate has taken place.