Regional growth and unemployment in the medium run: asymmetric cointegrated Okun’s Law for UK regions |
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Authors: | Silvia Palombi Christophe Tavéra |
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Institution: | 1. Department of Economics, University of Strathclyde, Glasgow G4 OLN, UK;2. CREM, University of Rennes 1, 35065 Rennes Cedex, France |
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Abstract: | This article tests for the presence of a medium-run asymmetric Okun’s Law relationship between regional output and regional unemployment rate in UK regions. The test is performed with a panel data version of the hidden cointegration technique suggested by Granger and Yoon. A novelty of the article is to combine the method of hidden cointegration with a panel data method of removing cross-sectional dependence. The medium-run Okun relationship for regions in the UK appears to confirm results found elsewhere in the literature on countries as a whole, although the coefficients tend to be smaller. |
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Keywords: | Okun’s Law hidden cointegration panel cointegration regional growth regional unemployment |
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