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Okun’s Law, Creation of Money and the Decomposition of the Rate of Unemployment

Author

Listed:
  • Stéphane Mussard

    (GREDI, Université de Sherbrooke and GEREM, Université de Perpignan)

  • Bernard Philippe

    (GEREM, Université de Perpignan)

Abstract

In this paper, we show that the rate of unemployment in period t depends on GDP and inflation rate in period t-1. We then show that GDP is related to money creation, and subsequently that the rate of unemployment is a decreasing function of this creation.

Suggested Citation

  • Stéphane Mussard & Bernard Philippe, 2006. "Okun’s Law, Creation of Money and the Decomposition of the Rate of Unemployment," Cahiers de recherche 06-20, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
  • Handle: RePEc:shr:wpaper:06-20
    as

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    File URL: http://gredi.recherche.usherbrooke.ca/wpapers/GREDI-0620.pdf
    File Function: First version, 2006
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    References listed on IDEAS

    as
    1. Mussard, Stephane & Peypoch, Nicolas, 2006. "On multi-decomposition of the aggregate Malmquist productivity index," Economics Letters, Elsevier, vol. 91(3), pages 436-443, June.
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    Citations

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    Cited by:

    1. Kovács Ildikó & Marton Noémi & Patka Kinga & Páll Katalin, 2010. "The Determinats Of The Unemployment Rate - Empirical Evidence From Romania," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 277-282, December.
    2. Mussard, Stéphane & Philippe, Bernard, 2011. "On the links between unemployment rate, monetary creation and the value-added sharing," Economic Modelling, Elsevier, vol. 28(3), pages 767-774, May.
    3. Durech, Richard & Minea, Alexandru & Mustea, Lavinia & Slusna, Lubica, 2014. "Regional evidence on Okun's Law in Czech Republic and Slovakia," Economic Modelling, Elsevier, vol. 42(C), pages 57-65.

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    More about this item

    Keywords

    Creation of Money; Decomposition; GDP; Rate of Unemployment;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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