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Okun's law in the Spanish regions

Author

Listed:
  • Adolfo Maza

    (University of Cantabria)

  • José Villaverde

    (University of Cantabria)

Abstract

The purpose of this paper is to analyse Okun's law for Spain and its seventeen regions over the period 1980-2004. Based on its “gap” specification and using two different detrending techniques, the results show that an inverse relationship between unemployment and output holds for most of the Spanish regions and for the whole country. However, the quantitative values of Okun''s coefficients for these regions are quite different. In addition, the coefficients for each region varied across the two detrending techniques. Even so, these coefficients are lower than those initially estimated by Okun and others.

Suggested Citation

  • Adolfo Maza & José Villaverde, 2007. "Okun's law in the Spanish regions," Economics Bulletin, AccessEcon, vol. 18(5), pages 1-11.
    • Handle: RePEc:ebl:ecbull:eb-07r10005
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. alamro, Hassan & Al-dalaien, Qusay, 2014. "Modeling the relationship between GDP and unemployment for Okun’s law specific to Jordan," MPRA Paper 55302, University Library of Munich, Germany.
    2. Porras-Arena, M. Sylvina & Martín-Román, Ángel L., 2023. "The heterogeneity of Okun's law: A metaregression analysis," Economic Modelling, Elsevier, vol. 128(C).
    3. Roger, Perman & Gaetan, Stephan & Christophe, Tavéra, 2013. "Okun’s law – A meta analysis," SIRE Discussion Papers 2013-59, Scottish Institute for Research in Economics (SIRE).
    4. Binet Marie-estelle & Francois Facchini, 2013. "Okun's law in the french regions: a cross-regional comparison," Economics Bulletin, AccessEcon, vol. 33(1), pages 420-433.
    5. Elhorst, J. Paul & Emili, Silvia, 2022. "A spatial econometric multivariate model of Okun's law," Regional Science and Urban Economics, Elsevier, vol. 93(C).
    6. Porras, María Sylvina & Martín-Román, Ángel L., 2017. "Self-employment and Okun’s Law relationship: the Spanish case," GLO Discussion Paper Series 157, Global Labor Organization (GLO).
    7. Piotr Ciżkowicz & Michał Kowalczuk & Andrzej Rzońca, 2016. "Heterogeneous determinants of local unemployment in Poland," Post-Communist Economies, Taylor & Francis Journals, vol. 28(4), pages 487-519, October.
    8. Durech, Richard & Minea, Alexandru & Mustea, Lavinia & Slusna, Lubica, 2014. "Regional evidence on Okun's Law in Czech Republic and Slovakia," Economic Modelling, Elsevier, vol. 42(C), pages 57-65.
    9. Ángel L. Martín‐Román & Jaime Cuéllar‐Martín & Alfonso Moral, 2023. "Natural and cyclical unemployment: A stochastic frontier decomposition and economic policy implications," Bulletin of Economic Research, Wiley Blackwell, vol. 75(1), pages 5-39, January.
    10. Bande, Roberto & Martín-Román, Ángel, 2018. "Regional differences in the Okun’s Relationship: New Evidence for Spain (1980-2015)," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 41, pages 137-165.
    11. Ryan Herzog, 2013. "Using state level employment thresholds to explain Okun’s Law," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-26, December.
    12. Porras-Arena, M. Sylvina & Martín-Román, Ángel L., 2019. "Self-employment and the Okun's law," Economic Modelling, Elsevier, vol. 77(C), pages 253-265.
    13. Roger Perman & Gaetan Stephan & Christophe Tavéra, 2015. "Okun's Law—a Meta-analysis," Manchester School, University of Manchester, vol. 83(1), pages 101-126, January.
    14. Ryan W Herzog, 2013. "An Analysis of Okun's Law, the Natural Rate, and Voting Preferences for the 50 States," Economics Bulletin, AccessEcon, vol. 33(4), pages 2504-2517.
    15. Cobos, Carlos, 2022. "High-Speed Rail: a panel data impact evaluation by Municipalities on depopulation and unemployment," UC3M Working papers. Economics 35284, Universidad Carlos III de Madrid. Departamento de Economía.
    16. Buendía Azorín, José Daniel & Sánchez de la Vega, María del Mar, 2017. "Output growth thresholds for the creation of employment and the reduction of unemployment: A spatial analysis with panel data from the Spanish provinces, 2000–2011," Regional Science and Urban Economics, Elsevier, vol. 67(C), pages 42-49.
    17. Marie-Estelle Binet & François Facchini, 2013. "Okun's Law in the French Regions: A Cross-Regional Comparison," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00812549, HAL.
    18. Connaughton, John E. & Madsen, Ronald A., 2010. "Understanding Differential State Expansions Following the 1990-1991 and 2001 Recessions," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 40(2), pages 1-9.
    19. Celia Melguizo Cháfer, 2015. "“An analysis of the Okun’s law for the Spanish provinces”," AQR Working Papers 201501, University of Barcelona, Regional Quantitative Analysis Group, revised Jan 2015.
    20. John Connaughton & Ronald Madsen, 2009. "Regional implications of the 2001 recession," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 43(2), pages 491-507, June.

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    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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