The current monetary policy framework of the Fed intends to be more 'inclusive' by running the economy hot for longer during expansions. The logic of this strategy rests on Okun's (1973) hypothesis that sustaining a 'high-pressure economy' persistently improves labor market outcomes of low-wage...

This study considers the nonlinear relationship between GDP growth and unemployment in France (1975-2024) using a logistic smooth transition regression (LSTR) model. Findings reveal a threshold unemployment rate of 7.93%, above which the traditional Okun's law holds (GDP growth reduces...

This paper examines the relationship between economic growth and rural unemployment in Brazil and Mexico, incorporating the effects of climate variability and spatial interactions. Okun's Law serves as the theoretical framework, and a dynamic spatial panel model is applied to estimate short-term...

The exchange rate is among the main variables determining foreign trade, as it affects the prices of both exports and imports. Meanwhile, Okun's misery index (MI) attempts to synthesize the main issues affecting a society by combining two major macroeconomic variables - unemployment and...

This study analyses the relationship between unemployment and economic growth at the international level, addressing the nature and decomposition of the Okun coefficient. Using World Bank data from 173 countries between 1991 and 2019, econometric techniques including decompositions and spatial...

We develop the first disaggregation of Okun's law that quantifies all of the information that is subsumed within its coefficients. The proposed method decomposes the coefficients into the sum of the direct effect of the change in output upon the unemployment rate, plus the indirect effects of...

This article examines the impact of robotization on the short-term correlation between employment and output. We estimate the Okun's Law relationship utilizing panel data from 35 OECD countries for the period from 1996 to 2020. Our empirical evidence, backed up by a battery of robustness tests,...

This paper provides new estimates of Okun's unemployment-output relationship in euro area countries between 1979 and 2019. We find our structural estimates are stable but substantially lower than the reduced-form estimates that tend to characterise the literature and that the responsiveness of...

This study investigated the relationship between unemployment rates and economic growth, known as Okun's Law. The non-linear autoregressive distributed lags (NARDL) model was employed using quarterly time series data sampled from 2000Q1 to 2021Q4. In this model, unemployment was used as the...

This paper aims to empirically examine the relationship between GDP and unemployment in Somalia from 2000 to 2021. The study also estimates Okun's coefficient. To evaluate the association between the unemployment rate and economic growth, we employ the Hodrick-Prescott (HP) filter detrending...

Maintaining optimal levels of unemployment and external debt remains a significant challenge for ensuring consistent economic growth in many developing countries. Despite persistent economic difficulties marked by political instability, high unemployment, external debt, inflation, and limited...

The misery index (MI) was devised to summarize the most evident costs for a society, attempting to objectively measure the loss in general welfare. It has been remarked in the literature that economic growth exerts a negative impact on the MI; however, analyses of this relationship in the...

In this paper, the correlation between unemployment rate and real output for OECD countries was analyzed through the application of Okun's Law and unemployment hysteresis 2007-2022. For this purpose, panel error correction, panel cointegration, ARDL Bounds Test and Granger causality techniques...

This paper provides new estimates of Okun’s unemployment-output relationship in euro area countries between 1979 and 2019. We find our structural estimates are stable but substantially lower than the reduced-form estimates that tend to characterise the literature and that the responsiveness of...

This paper aims to establish the asymmetric effects in the short and long term of cyclical output on Algeria's unemployment rate during the period 1970-2018. To achieve this objective, the "Okun" relation was applied, relying on a NARDL model methodology in the estimation. The main results of...

We propose a unique method of nowcasting and forecasting GDP growth based on a forward-looking measure of unemployment (FLUR) and Okun's law that offers a number of advantages over current leading indicators of the Swiss business cycle. The following investigation, covering the period from...

Purpose: This paper retested the Okun’s Law established in the 1960s and the subsequent research on Okun’s findings that a 1% increase in unemployment would lead to a 3 % decrease in GDP), i.e. Okun’s coefficient (β)= -3 in diverse economies of sixteen South and Southeast Asia, sixteen...

We analyse the effect of COVID-19 on the Okun's law relationship for several EU countries and the US. Results are based on regressions and a systematic DF-Beta analysis. Our results indicate that the year 2020 is an outlier in the Okun relationship. However, the direction of change is different...

Using the time series statistical data of Uzbekistan and VAR framework, we made an attempt to investigate the relationship between the key macroeconomic tools of maintaining macroeconomic stability: inflation and unemployment. Our empirical findings showed that unemployment rate and inflation...

The current monetary policy framework of the Fed intends to be more 'inclusive' by running the economy hot for longer during expansions. The logic of this strategy rests on Okun's (1973) hypothesis that sustaining a 'high-pressure economy' persistently improves labor market outcomes of low-wage...

The main objective of this paper is to assess the impact of female unemployment on economic growth in Cameroon. Using the Auto Regressive Distributed Lag (ARDL) model, applied to data covering the period 1987-2020, our results show that the relationship between female unemployment and economic...

This paper studies the unemployment-output relationship from 1979 to 2019 in advanced countries. The paper offers three main contributions: it reports (i) structural and (ii) dynamic estimates that (iii) account for idiosyncratic and common shocks in a Structural Panel-VAR framework. The main...

In this paper, we analyse Okun's law - a relation between the change in the unemployment rate and GDP growth - using data from Australia, the euro area, the United Kingdom and the United States. More specifically, we assess the relevance of non-Gaussianity when modelling the relation. This is...

Despite its stability over time, as for any statistical relationship, Okun’s law is subject to deviations that can be large at times. In this paper, we provide a mapping between residuals in Okun’s regressions and structural shocks identified with a SVAR model by inspecting how unemployment...

The negative and stable relationship between an economy’s aggregate demand conditions and overall unemployment is well-documented. We show that there is a large degree of heterogeneity in the cyclical sensitivities of unemployment across worker and economy groups. First, unemployment is more...

We investigate Okun's law in some European countries over 1985-2020 period, with a focus on the COVID-19 pandemic. We compare estimates using traditional OLS and an M-robust estimator within a rolling regression framework. Firstly, we found that the M-estimator outperforms the OLS estimator in...