The Relation between Unemployment Rate and Economic Growth in USA

Authors

  • Iulia Roșoiu The Bucharest University of Economic Studies
  • Andreea Roșoiu The Bucharest University of Economic Studies

Keywords:

economic growth, Okun's Law, regression analysis, unemployment rate, United States of America

Abstract

The relation between unemployment rate and gross domestic product for the economy of United States of America is important to be analyzed, especially in the context of the current financial crisis. The relation between these two variables is known in the economic literature as Okun's Law. According to this law, during recession periods, the unemployment rate has a stronger reaction to a certain variation in gross domestic product evolution. On the other hand, the unemployment rate keeps its value around a natural level during economic upswings periods. The results obtained from the regression between unemployment rate and economic growth over the period 1977-2011 show that these variables respect the relation described by Okun's Law. Moreover, the evolution of the unemployment rate is also influenced by other factors which are not included in the analysis.

Author Biographies

Iulia Roșoiu, The Bucharest University of Economic Studies

Faculty of Finance, Insurance, Banks and Stock Exchanges

Andreea Roșoiu, The Bucharest University of Economic Studies

Faculty of Finance, Insurance, Banks and Stock Exchanges

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Published

2014-02-01

How to Cite

Roșoiu, I., & Roșoiu, A. (2014). The Relation between Unemployment Rate and Economic Growth in USA. International Journal of Economic Practices and Theories, 4(2), 162-167. Retrieved from http://ijept.eu/index.php/ijept/article/view/The_Relation_between_Unemployment_Rate_and_Economic_Growth_in_

Issue

Vol. 4 No. 2 (2014): Special issue on Marketing and Business Development

Section

Articles

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