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Employment and Asset Prices

  • Gylfi Zoega

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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Paper provided by Department of Economics, Central bank of Iceland in its series Economics with number wp46.

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Date of creation: Nov 2009
Handle: RePEc:ice:wpaper:wp46
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