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Asymmetry Relationship between Economic Growth and Unemployment Rates in the Arab countries: Application of the OKUN Law during 1960-2017

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  • Louail Bilal

    (Ph.D., College of Business Administration, Northern Border University, Arar, Saudi Arabia and Faculty of Economic, Commercial and Management Sciences, University of M’Hamed BOUGARA Boumerdes, Algeria)

  • Ben Haj Hamida Hayet

    (Ph.D., Univ. Carthage, Institut des Hautes Etudes Commerciales de Carthage (IHEC), Tunisia and Univ. Tunis El Manar, Faculté des Sciences Economiques et de Gestion de Tunis (FSEGT), Prospective, Stratégies et Développement Durable Laboratory (PS2D), Tunisia)

Abstract

A well-known macroeconomic relationship is called the OKUN Law, which states that the negative correlation between unemployment rates and raw domestic output can be determined. This study will focus on the theoretical framework for developing models of the relationship between economic growth and unemployment rates. This study contributes to the existing literature by estimate Okun’s law for Arab economies during the period 1960–2017. The results of this study indicate that Okun’s coefficient is valid for the case of Arab countries in the different version, when unemployment rates reach the threshold and are between 6.35 and 7.933, in which the impact of the GDP on unemployment rates is negative and significant, with a significant level of 1 per cent. As for outside the threshold, i.e. less than 6.35 and more significant than 7.933, this effect is negative, but it is not significant.

Suggested Citation

  • Louail Bilal & Ben Haj Hamida Hayet, 2021. "Asymmetry Relationship between Economic Growth and Unemployment Rates in the Arab countries: Application of the OKUN Law during 1960-2017," Management, Sciendo, vol. 25(2), pages 1-21, December.
    • Handle: RePEc:vrs:manmen:v:25:y:2021:i:2:p:1-21:n:8
    DOI: 10.2478/manment-2019-0070
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    References listed on IDEAS

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    More about this item

    Keywords

    OKUN Law; Gross Domestic Product; Unemployment Rate; Arab Countries;
    All these keywords.

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • P41 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Planning, Coordination, and Reform

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