The Validity of Okun’s Law: An Assessment of United Kingdom’s Unemployment-Output Relationship

Authors

  • Emmanuel Olusegun Stober Bucharest University of Economic Studies

Keywords:

Okun’s law, Okun’s coefficients Unemployment, Output.

Abstract

Forgone output resulting from unemployment is a real concern for many countries including the United Kingdom which manages to keep it unemployment rate at an average of 7% over the last 43 years. This paper provides an assessment of the unemployment-output relationship by examining the validity of okun’s law, using quarterly time series data from 1971- 2013. The empirical evidences show negative correlation, implying that Okun’s law interpretation is applicable to United Kingdom with economic growth rate of 1.8% required to keep unemployment constant. While the evolution of the unemployment rate is also influenced by other unforeseen variables like productivity, severe winter weather condition and the Diamond Jubilee in 2012.

Author Biography

Emmanuel Olusegun Stober, Bucharest University of Economic Studies

Doctorate Student, Department of International Business and Economics

Downloads

Published

2015-01-01

How to Cite

Stober, E. O. (2015). The Validity of Okun’s Law: An Assessment of United Kingdom’s Unemployment-Output Relationship. International Journal of Economic Practices and Theories, 5(1), 10-15. Retrieved from http://ijept.eu/index.php/ijept/article/view/The_Validity_of_Okun_Law_An_Assessment_of_United_Kingdom_Unemp

Issue

Vol. 5 No. 1 (2015)

Section

Articles

License

Authors who publish with this journal agree to the following terms:

  1. Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.

  2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.

  3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).