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Alternative Methods of Estimating the Okun Coefficient. Applications for Romania

Author

Listed:
  • Caraiani, Petre

    (Institute for Economic Forecasting, Bucharest)

Abstract

The purpose of this study is to estimate the Okun coefficient for Romania for the 1991-2004 period. In order to derive it, I use a few alternative methods. As a dependent variable I use the gap of the unemployment rate while the independent variable is the gap of the production, where the aggregate production is approximated by the industrial production. I estimate the relationship through an ARDL model and through a bivariate structural VAR. The results indicate an Okun coefficient of about -0.17 which suggests some rigidity of the labor market.

Suggested Citation

  • Caraiani, Petre, 2006. "Alternative Methods of Estimating the Okun Coefficient. Applications for Romania," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 3(4), pages 82-89, December.
  • Handle: RePEc:rjr:romjef:v:3:y:2006:i:4:p:82-89
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    References listed on IDEAS

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    1. Dominique Desruelle & Alessandro Zanello, 1997. "A Primeron the IMF's Information Notice System," IMF Working Papers 97/71, International Monetary Fund.
    2. Haug, Alfred A. & MacKinnon, James G. & Michelis, Leo, 2000. "European Monetary Union: a cointegration analysis," Journal of International Money and Finance, Elsevier, vol. 19(3), pages 419-432, June.
    3. Pelinescu Elena, 2005. "Cursul de schimb ca indicator de competitivitate," Revista OEconomica, Romanian Society for Economic Science, Revista OEconomica, issue 04, December.
    4. Nilsson, Kristian, 1999. "Alternative Measures of the Swedish Real Effective Exchange Rate," Working Papers 68, National Institute of Economic Research.
    5. Martine Durand & Jacques Simon & Colin Webb, 1992. "OECD's Indicators of International Trade and Competitiveness," OECD Economics Department Working Papers 120, OECD Publishing.
    6. Martine Durand & Christophe Madaschi & Flavia Terribile, 1998. "Trends in OECD Countries' International Competitiveness: The Influence of Emerging Market Economies," OECD Economics Department Working Papers 195, OECD Publishing.
    7. Luca Buldorini & Stelios Makrydakis & Christian Thimann, 2002. "The effective exchange rates of the euro," Occasional Paper Series 02, European Central Bank.
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    Citations

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    Cited by:

    1. Petre Caraiani, 2010. "Bayesian Linear Estimation of Okun Coefficient for Romania: Sensitivity to Priors Distributions," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 13(38), pages 53-65, December.
    2. repec:aud:audfin:v:15:y:2017:i:148:p:667 is not listed on IDEAS

    More about this item

    Keywords

    Business Cycles; Unemployment; Okun's Law;

    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
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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