THE IMPACT OF ECONOMIC GROWTH ON UNEMPLOYMENT: TESTING THE VALIDITY OKUN’S LAW FOR E7 COUNTRIES

Öz

It is generally stated that the relationship between unemployment and growth is inversely proportional. Increases in economic growth reduce unemployment rates. One of the most well-known theories explaining the relationship between unemployment and growth is Okun's Law. According to this law, unemployment rates decrease when the Gross Domestic Product (GDP) in an economy grows above its potential. If growth slows down or becomes negative, unemployment increases. Economic growth leads to increased production and investment. This causes businesses to create more labor force. Therefore, the number of unemployed decreases with the increase in employment. The aim of this study is to investigate the effect of economic growth on unemployment, i.e. the validity of the law of arrows, for E7 countries using data for the years 1994-2023. In the findings, it is concluded that increases in economic growth for E7 countries reduce unemployment rates across the panel. In other words, it is concluded that a 1% increase in economic growth rates leads to a 0.9173% decrease in unemployment rates.

Anahtar Kelimeler

• Economic Growth
• Unemployment
• Okun's Law

EKONOMİK BÜYÜMENİN İŞSİZLİK ÜZERİNE ETKİSİ: E7 ÜLKELERİ İÇİN OKUN YASASI GEÇERLİLİĞİNİN TEST EDİLMESİ

Öz

İşsizlik ve büyüme arasındaki ilişkinin genellikle ters orantılı olduğu ifade edilmektedir. Ekonomik büyümede meydana gelen artışlar işsizlik oranlarını azaltmaktadır. İşsizlik ve büyüme arasındaki ilişkiyi açıklayan en bilinen teorilerden birisi Okun Kanunudur. Bu kanuna göre bir ekonomide Gayri Safi Yurt İçi Hasıla (GSYİH )’nın potansiyelin üzerinde büyümesi ile işsizlik oranları düşmektedir. Eğer büyüme yavaşlar ya da negatif olursa işsizlik artmaktadır. Ekonomik büyüme, üretimin ve yatırımın artmasını sağlar. Bu da işletmelerin daha fazla işgücü yaratmasına sebep olmaktadır. Dolayısıyla istihdam artışıyla işsiz sayısında azalış meydana gelir. Bu çalışmanın amacı 1994-2023 yılları verilerini kullanarak E7 ülkeleri için ekonomik büyümenin işsizlik üzerine etkisini yani okun yasasının geçerliliğini araştırmaktır. Elde edilen bulgularda E7 ülkeleri için ekonomik büyümede meydana gelen artışların işsizlik oranlarını panel genelinde azalttığı sonucuna varılmıştır. Başka bir ifadeyle ekonomik büyüme oranlarında meydana gelen %1’lik artışın işsizlik oranlarında %0.9173 oranında azalış meydana getirdiği sonucuna varılmıştır.

Anahtar Kelimeler

• Ekonomik Büyüme
• İşsizlik
• Okun Yasası

Kaynakça

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