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Okun’s Law: The effects of the COVID-19 pandemic and the temporary layoffs procedures (ERTEs) on Spanish regions

Author

Listed:
  • Porras-Arena, M. Sylvina

    (Universidad de la República)

  • Martín-Román, Ángel L.

    (Universidad de Valladolid)

  • Dueñas Fernández , Diego

    (Universidad de Alcalá)

  • Llorente Heras, Raquel

    (Universidad Autónoma de Madrid)

Abstract

Official statistics indicated a break in Okun’s law in all the Spanish regions due to the COVID-19 pandemic; however, herein, evidence of the validity of the law is shown. The temporary layoff procedures (ERTEs) allowed many workers to maintain their jobs. From the productive point of view, the law remained in effect in the regions, showing a strong relationship between idle labour resources and economic activity, and from the social point of view, the apparent breakdown of the law can be interpreted as the implementation of a policy that mitigated the dramatic impact of the economic crisis.

Suggested Citation

  • Porras-Arena, M. Sylvina & Martín-Román, Ángel L. & Dueñas Fernández , Diego & Llorente Heras, Raquel, 2024. "Okun’s Law: The effects of the COVID-19 pandemic and the temporary layoffs procedures (ERTEs) on Spanish regions," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 59, pages 105-125.
  • Handle: RePEc:ris:invreg:0533
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Okun’s law; ERTE; expanded unemployment rate;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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