Okun's Law: Empirical Evidence from Pakistan (1981-2005)
2012 (English)Independent thesis Advanced level (degree of Master (One Year)), 20 credits / 30 HE credits
Student thesis
Abstract [en]
The main objective of this research paper is to find the association between unemployment rate and GDP growth which is presented empirically by Arthur Okun’s in early 1960s. For this purpose I have used annual time series data during the period 1981-2005 of Pakistan. I applied difference version of Okun’s law which is more appropriate to access results directly from empirical data. In order to find long run relation between the variables I used Engle-Granger cointegration technique and Error Correction Mechanism (ECM) to find the short term behavior of GDP growth to its long run value. This paper verifies negative relationship between unemployment rate and GDP growth and both variables have long run relation with each other. Moreover GDP growth will adjust more quickly towards equilibrium in the long run.
Place, publisher, year, edition, pages
2012. , p. 39
Keywords [en]
Error Correction Mechanism (ECM), Engle-Granger, Cointegration, Gross Domestic Product (GDP), unemployment rate, difference version, Okun’s Law.
National Category
Economics
Identifiers
URN: urn:nbn:se:sh:diva-16168OAI: oai:DiVA.org:sh-16168DiVA, id: diva2:525872
Subject / course
Economics
Presentation
2012-04-27, ME111, Södertörns högskola Box 4101, 141 04 Huddinge, Stockholm, 15:28 (English)
Uppsok
Social and Behavioural Science, Law
Supervisors
Examiners
2012-05-102012-05-092012-05-10Bibliographically approved