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Okun’s law applied to different countries in different continents: Does the method of estimation affect Okun’s coefficient?
Södertörn University, School of Social Sciences.
2022 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesisAlternative title
Okuns lag tillämpad till olika länder i olika kontinenter : Hur påverkas Okuns koefficienten av beräknings metod? (Swedish)
Abstract [en]

This study tests if Okun’s law can be used applied to several countries in different continents from the year 1991-2020. This is done with Okun's gap model to calculate Okun's coefficient, that test percentage decrease in output when unemployment rate increases above natural level. In order to use this model, one must calculate potential production and natural rate of unemployment. To test if different methods of calculation will affect the coefficient, natural rate of unemployment potential output are calculated with two different methods, linear and fitted trend line. The result of this study showed that continents with most developing countries showed significant coefficients when natural rate of unemployment and potential output are estimated with linear trendline, while continents with predominantly developed countries showed significant coefficients with the fitted estimation trend line. In conclusion, Okun's law can be applied to the majority of tested countries and the method used can give different results.

Place, publisher, year, edition, pages
2022. , p. 42
Keywords [en]
Okun’s law, output, unemployment
Keywords [sv]
Okuns lag, total produktion, arbetslöshet
National Category
Economics
Identifiers
URN: urn:nbn:se:sh:diva-50055OAI: oai:DiVA.org:sh-50055DiVA, id: diva2:1702872
Subject / course
Economics
Supervisors
Examiners
Available from: 2022-10-12 Created: 2022-10-11 Last updated: 2022-10-12Bibliographically approved

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • harvard-anglia-ruskin-university
  • apa-old-doi-prefix.csl
  • sodertorns-hogskola-harvard.csl
  • sodertorns-hogskola-oxford.csl
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf