Year 2016,
Volume: 2 Issue: 3, 31 - 44, 01.09.2016
Abstract
The relationship between economic growth and employment has always preoccupied economists and politicians. To study the relationship between, on the one hand, the evolution of economic growth and, secondly, the unemployment, economists are accustomed to refer to the "Okun's law". The main objective of this paper is to estimate the Okun’s coefficient, and to check the validity of Okun’s law in some emerging countries (Brazil, Russia, India, China, South Africa and Turkey) to see whether it is valid or not, using the time series annual data during the period 1990-2014. Engle granger co-integration test and Fully Modified OLS are employed. Empirical evidences show that Okun’s law interpretation may not be applicable in some emerging countries. Tests of cointegration revealed long-run association between unemployment and economic growth except the case of Brazil. Our findings suggest that Okun’s law is not valid for Turkey, South Africa and Brazil
Keywords
References
- Abiodun S. Bankole and Basiru Oyeniran Fatai, (2013). “Empirical Test of Okun’s L Nigeria”. University of Ibadan, Ibadan, Nigeria.
- Arthur Malvin Okun, (1962), “Potential GNP: its Measurement and Significance” Proceedings of the Business and Economic Statistics Section of the American Statistical Association, 1962
- Arthur Malvin Okun, (1970), “The political economy of prosperity”, New York, Norton.
- Baker and Schmidt, (1997). “The Macroeconomic Roots of High Unemployment: The Impact of Foreign Growth”, WSI Mitteilungen Paper October 1998
- Buescher and Muller, (1999). “Exchange Rate Volatility Effects on the German Labour Market”, Intereconomics, January 2000
- Celia M. Cháfer, (2015), “An analysis of the Okun’s law for the Spanish provinces” Universitat de Barcelona, Regional Quantitative Analysis Research Group Working Paper 2015/01 1/37
- Cellia W. Dugger, (2010). “Wage Laws Squeeze South Africa’s Poor”, New York Time
- Centre for Economics and Business Research, (2016). “World Economıc League Table 2015”, http://www.cebr.com/reports/world-economic-league-table-2015/
- Craig Berry, (2014), “The relationship between economic growth and population growth” Sheffield Political Economy Research Institute Interdisciplinary Centre of the Social Sciences
- Guilherme A. Tombolo and M. Minoru Hasegawa, (2014). “Okun's law: evidence for the Brazilian economy”, Federal University of Parana, Munich Personal RePEc Archive
- Hakan Demirgil, (2010). “Okun Yasası’nın Türkiye İçin Geçerliliğine Dair Ampirik Bir Çalışma”, Alanya İşletme Fakültesi Dergisi (2010:139-151) http://www.nytimes.com/2010/09/27/world/ africa/27safrica.html?_r=1
- Hubert Gabrisch and Herbert Buscher (2005). “The Unemployment-Growth Relationship in Transition Countries”, IWH Discussion Papers from Halle Institute for Economic Research
- Irfan Lal, Sulaiman D. Muhammad, M. Anwer Jalil and Adnan Hussain, (2010), “Test of Okun’s Law in Some Asian Countries Co-Integration Approach”
- Jeuneafrique, (2013). “L’Afrique du Sud est-elle vraiment une puissance émergente ?”, http://www.jeuneafrique.com/depeches/38018/politique/lafrique-du-sud-est-elle-vraiment- une-puissance-emergente/
- Lakhdar Adouka and Zohra Bouguell, (2012). “Estimation de la loi de Okun en Algérie à l’aide de modèle ECM”, Université de Mascara
- Nasreen Seria, (2010). “Africa Boom Lures Investors as Growth Set to Double,” Bloomberg (May 2010) http://farmlandgrab.org/12637
- OECD (2014). “OECD Economic Surveys: Turkey 2014”, OECD Publishing. http://dx.doi.org/ 10.1787/eco_surveys-tur-2014-en
- Prachowny M, (1993). “Okun's Law: Theoretical Foundations and Revised Estimates”, The Review of Economics and Statistics Vol. 75, No. 2 (May, 1993), pp. 331-336
- Salih Barışık, Emrah İsmail Çevik and Nüket Kirci Çevik, (2012), “Türkiye’de Okun Yasası, Asimetri İlişkisi ve İstihdam Yaratmayan Büyüme: Markov-Switching Yaklaşımı”, Gaziosmanpaşa Üniversitesi
- Tejvan Pettinger, (2015), “Economic Growth”, http://www.economicshelp.org/macroeconomics /economic-growth/
- Temitope L. A. Leshoro, (2013), “Does Economic Growth Lead Employment in South Africa?”, Journal of Economics and Behavioral Studies Vol. 5, No. 6, pp. 336-345, June 2013 (ISSN: 2220-6140)
- Theguardian, (2012), “Brazil's economy overtakes UK to become world's sixth largest”,http://www.theguardian.com/business/2012/mar/06/brazil-economy-worlds-sixthlargest
- World Bank (2016), 2011 http://data.worldbank.org/Indicator
- World Bank, (2016), http://www.worldbank.org/en/country/turkey/overview
Year 2016,
Volume: 2 Issue: 3, 31 - 44, 01.09.2016
Abstract
References
- Abiodun S. Bankole and Basiru Oyeniran Fatai, (2013). “Empirical Test of Okun’s L Nigeria”. University of Ibadan, Ibadan, Nigeria.
- Arthur Malvin Okun, (1962), “Potential GNP: its Measurement and Significance” Proceedings of the Business and Economic Statistics Section of the American Statistical Association, 1962
- Arthur Malvin Okun, (1970), “The political economy of prosperity”, New York, Norton.
- Baker and Schmidt, (1997). “The Macroeconomic Roots of High Unemployment: The Impact of Foreign Growth”, WSI Mitteilungen Paper October 1998
- Buescher and Muller, (1999). “Exchange Rate Volatility Effects on the German Labour Market”, Intereconomics, January 2000
- Celia M. Cháfer, (2015), “An analysis of the Okun’s law for the Spanish provinces” Universitat de Barcelona, Regional Quantitative Analysis Research Group Working Paper 2015/01 1/37
- Cellia W. Dugger, (2010). “Wage Laws Squeeze South Africa’s Poor”, New York Time
- Centre for Economics and Business Research, (2016). “World Economıc League Table 2015”, http://www.cebr.com/reports/world-economic-league-table-2015/
- Craig Berry, (2014), “The relationship between economic growth and population growth” Sheffield Political Economy Research Institute Interdisciplinary Centre of the Social Sciences
- Guilherme A. Tombolo and M. Minoru Hasegawa, (2014). “Okun's law: evidence for the Brazilian economy”, Federal University of Parana, Munich Personal RePEc Archive
- Hakan Demirgil, (2010). “Okun Yasası’nın Türkiye İçin Geçerliliğine Dair Ampirik Bir Çalışma”, Alanya İşletme Fakültesi Dergisi (2010:139-151) http://www.nytimes.com/2010/09/27/world/ africa/27safrica.html?_r=1
- Hubert Gabrisch and Herbert Buscher (2005). “The Unemployment-Growth Relationship in Transition Countries”, IWH Discussion Papers from Halle Institute for Economic Research
- Irfan Lal, Sulaiman D. Muhammad, M. Anwer Jalil and Adnan Hussain, (2010), “Test of Okun’s Law in Some Asian Countries Co-Integration Approach”
- Jeuneafrique, (2013). “L’Afrique du Sud est-elle vraiment une puissance émergente ?”, http://www.jeuneafrique.com/depeches/38018/politique/lafrique-du-sud-est-elle-vraiment- une-puissance-emergente/
- Lakhdar Adouka and Zohra Bouguell, (2012). “Estimation de la loi de Okun en Algérie à l’aide de modèle ECM”, Université de Mascara
- Nasreen Seria, (2010). “Africa Boom Lures Investors as Growth Set to Double,” Bloomberg (May 2010) http://farmlandgrab.org/12637
- OECD (2014). “OECD Economic Surveys: Turkey 2014”, OECD Publishing. http://dx.doi.org/ 10.1787/eco_surveys-tur-2014-en
- Prachowny M, (1993). “Okun's Law: Theoretical Foundations and Revised Estimates”, The Review of Economics and Statistics Vol. 75, No. 2 (May, 1993), pp. 331-336
- Salih Barışık, Emrah İsmail Çevik and Nüket Kirci Çevik, (2012), “Türkiye’de Okun Yasası, Asimetri İlişkisi ve İstihdam Yaratmayan Büyüme: Markov-Switching Yaklaşımı”, Gaziosmanpaşa Üniversitesi
- Tejvan Pettinger, (2015), “Economic Growth”, http://www.economicshelp.org/macroeconomics /economic-growth/
- Temitope L. A. Leshoro, (2013), “Does Economic Growth Lead Employment in South Africa?”, Journal of Economics and Behavioral Studies Vol. 5, No. 6, pp. 336-345, June 2013 (ISSN: 2220-6140)
- Theguardian, (2012), “Brazil's economy overtakes UK to become world's sixth largest”,http://www.theguardian.com/business/2012/mar/06/brazil-economy-worlds-sixthlargest
- World Bank (2016), 2011 http://data.worldbank.org/Indicator
- World Bank, (2016), http://www.worldbank.org/en/country/turkey/overview
There are 24 citations in total.
Details
| Primary Language | English |
|---|---|
| Journal Section | Research Article |
| Authors | |
| Publication Date | September 1, 2016 |
| Published in Issue | Year 2016 Volume: 2 Issue: 3 |