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Employment and Asset Prices

  • Gylfi Zoega

    (Department of Economics, Mathematics & Statistics, Birkbeck)

A medium-term relationship exists between share prices, normalised by labour productivity, and the rate of unemployment in the OECD countries. A similar relationship appears to exist between unemployment and house prices. This helps explain decadal changes in mean unemployment, such as the shift to higher mean unemployment in the Continental European countries in the 1970s and 1980s that coincided with a fall in the level of share prices, as well as differences in mean unemployment between countries.

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File URL: http://www.bbk.ac.uk/ems/research/wp/PDF/BWPEF0917.pdf
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Paper provided by Birkbeck, Department of Economics, Mathematics & Statistics in its series Birkbeck Working Papers in Economics and Finance with number 0917.

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Date of creation: Nov 2009
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Handle: RePEc:bbk:bbkefp:0917
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