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Uma Aplicação da Lei de Okun em Portugal

  • João Sousa Andrade

    ()

    (GEMF and Faculdade de Economia, Universidade de Coimbra)

We know from experience that weak economic growth increases the unemployment rate. In 1962 Okun proposed to measure potential output in terms of unemployment gap. From this relation a direct link between increase in unemployment and output growth was deduced, known as the Okun Law. This Law is one of the pillars of empirical macroeconomics. One of the problems of this Law is the iteration between the variables involved and the non-stationarity of these variables. As a consequence we must be careful with the stability and the possible asymmetry of Okun’s Law. We apply these ideas to the Portuguese economy in order to obtain an estimated Okun Law. We can conclude by the temporal stability of a dynamic formulation of the Law, although we also conclude by the presence of an asymmetric behaviour of the Law.

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File URL: http://gemf.fe.uc.pt/workingpapers/pdf/2007/gemf_2007-04.pdf
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Paper provided by GEMF - Faculdade de Economia, Universidade de Coimbra in its series GEMF Working Papers with number 2007-04.

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Length: 39 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:gmf:wpaper:2007-04
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  1. Lee, Jim, 2000. "The Robustness of Okun's Law: Evidence from OECD Countries," Journal of Macroeconomics, Elsevier, vol. 22(2), pages 331-356, April.
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  11. Perloff, Jeffrey M. & Wachter, Michael L., 1979. "A production function--nonaccelerating inflation approach to potential output : Is measured potential output too high?," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 10(1), pages 113-163, January.
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