THE SPECIFICS OF OKUN’S LAW IN THE ROMANIAN ECONOMY BETWEEN 2007 AND 2013

Pitorac Ruxandra
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Pitorac Ruxandra: WEST UNIVERSITY OF TIMISOARA

Annals - Economy Series, 2015, vol. 1II, 50-53

Abstract: The objective of this article is to study the Romanian economy after 2007 and to identify its main characteristics related to the GDP and unemployment sector. The research starts with a brief theoretical review on Okun's coefficient and presents two approaches identified in the literature, used in the study of Okun's law: the ”firstdifference model” and the „gap model”. In this paperwork we have chosen the second approach on Okun's law to determine the specific of Romanian economy after integration in the European Union. Thus, was performed the quantitative analysis of the two macroeconomic indicators, with the help of the Hodrick-Prescott filter, the output gap and the unemployment gap were calculated, and by empirical analyzing the correlations between them with the help of a single factor regression model, the Okun's law for Romanian economy was obtained. The research results revealed that, in the analyzed period, fiscal and monetary policies were not sufficient to reduce unemployment, therefor other types of policies had to be implemented.

Keywords: GDP; unemployment rate; Okun's law; HP Filter (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:cbu:jrnlec:y:2015:v:1ii:p:50-53

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