Okun’s law revisited

Regional Growth and Unemployment: The Validity of Okun's Law for the Finnish Regions

“…If Okun's Law would be strictly valid, Finland will encounter a problematic labour market development in the near future. Clearly, if a strict linear relationship does not hold, other determinants will impact on the future unemployment rate (see also Freeman 2001, Gordon 1984, Moosa 1997b, Knoester 1986). Therefore, the reliability of Okun's coefficients is not only of paramount importance for macroeconomic policy, but also for the regional distribution of unemployment rates in an open spatial system.…”

Age Effects in the Okun's Law within the Eurozone

“…Much research has been conducted and almost all studies confirm this negative relationship (Knoester (1986), Paldam (1987), Kaufman (1988), Moosa (1997), Lee (2000), Freeman (2001), Silverstone and Harris (2001), Sögner and Stiassny (2002), Holmes and Silverstone (2006), Knotek (2007)). Therefore, Blinder (1997) calls it a core element of practical macroeconomic analysis we should all believe in.…”

An examination of Okun's law: evidence from regional areas in Greece

“…While the majority of these studies investigated the validity of the law for the USA, the relationship has also been examined for other countries as well (Knoester, 1986;Kaufman, 1988;Moosa, 1997). Knoester (1986) reported that the law was not enough to explain the high unemployment rates for Europe, especially after the 1970s. Prachowny (1993) and Attfield and Silverstone (1995) provided evidence that a 1% reduction in unemployment leads to only a 2/3% increase in output.…”

“…Finally, is the Okun coefficient. Relevant studies have investigated the properties of Okun's law for certain economies (Motley, 1984;Knoester, 1986;Holloway, 1989;Watts and Mitchell, 1991;Prachowny, 1993;Moosa, 1997). While the majority of these studies investigated the validity of the law for the USA, the relationship has also been examined for other countries as well (Knoester, 1986;Kaufman, 1988;Moosa, 1997).…”

“…According to this, an increase of 1% in the unemployment rate leads to a fall of about 3% in the growth of real GNP. The law has been frequently used in conjunction with the Phillips curve for economists as well as policy makers to understand the implications of certain economic policy measures for labour as well as commodity markets (Knoester, 1986).…”