Theoretical and Applied Economics
No. 4 / 2018 (617), Winter
A revisited causality analysis of Okun’s Law: The case of Turkey
Osmaniye Korkut Ata University, Turkey
Suleyman YURTKURAN
Karadeniz Technical University, Turkey
Adem KALCA
Karadeniz Technical University, Turkey
Abstract. The relationship between the gross domestic product (GDP) and unemployment is analyzed with Okun’s Law. Different studies that assess whether the two variables affect one another are examined with regard to Turkey. In this study, the authors examined whether an increase in GDP causes unemployment to fall or not with the youth (15-24 years) unemployment rate, prime working years (25-54) unemployment rate, and general (15-64) unemployment rate in Turkey. The relationship between GDP and unemployment was investigated using the unrestricted VAR and Hsiao’s Granger causality test, covering the period of 2006q2 to 2014q4. According to the causality tests, the empirical results show a negative unidirectional and statistically significant causality relationship from GDP to unemployment rates in the short term. Consequently, Okun’s Law is valid for Turkey.
Contents
Origin and continuity in spatial development: The case of Romania
Study of population by domicile and residence. Natural movement and imbalances
Romanian branded hotels: are they worth the effort?
Biracial Asian and white: Demographic and labor market status
Institutionalized social technologies index: A global perspective
Sustainability and efficiency of microfinance institutions in South Asia
A revisited causality analysis of Okun’s Law: The case of Turkey
Causality between foreign direct investments and exports in India
Structural budget balance and fiscal policy stance in Tunisia
Price transmission for natural rubber: India integration with world markets
Tax smoothing hypothesis: The Tunisian case
The importance of efficiency for life insurer profit: A study of Canadian life insurance companies
Does financial sector affect economic development in ASEAN during 2010-2016?
Do remittances really attract foreign direct investments? Evidence from panel cointegration
The effect of credit default swap premiums on developing markets’ economies: The case of exchange rates