Research Article

Does output predict unemployment? A look at Okun's law in Greece

Authors: Costas KARFAKIS (Department of Economics, University of Macedonia and School of Social Science, Hellenic Open University.) , Constantinos KATRAKILIDIS (Department of Economics, Aristotle University of Thessaloniki.) , Eftychia TSANANA (International Labour Review)

  • Does output predict unemployment? A look at Okun's law in Greece

    Research Article

    Does output predict unemployment? A look at Okun's law in Greece

    Authors: , ,

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Abstract

This is an accepted article with a DOI pre-assigned that is not yet published.

Using a dynamic specification of Okun's law, the authors examine the relationship between unemployment and output in Greece over the period 2000–12. While Granger causality tests indicate that real output is important to understanding future movements in unemployment, Okun's ratio is found to be 3:1, implying that a 1 per cent increase in unemployment was associated with a 3 per cent decrease in real output during the 13‐year period under study. Also, asymmetric analysis shows that the response of unemployment to real output is stronger during contractions of real economic activity than in expansionary periods.

Keywords: input output analysis, unemployment, Greece, labour productivity, economic recession

Rights: Copyright © The authors 2014 Journal compilation © International Labour Organization 2014

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