A Nonlinear Relationship: Unemployment and Economic Growth (Construction Sector) in Spain, 1995.1–2012.2

Eduardo Loría () and Emmanuel Salas

International Advances in Economic Research, 2014, vol. 20, issue 4, 439-453

Abstract: A quadratic version of the first-difference Okun’s Law model was estimated for Spain (1995.Q1-2012.Q2). An accelerationist version of Okun’s Law was obtained, which allowed us to calculate variable Okun coefficients as well as critical points in the relationship between construction sector growth and the variation in overall unemployment. The optimal economic growth rate was determined to be 7.38 %. By applying principal components, it is demonstrated that this sector led the economic process after 1995. Copyright International Atlantic Economic Society 2014

Keywords: Spain; First-difference Okun’s Law (accelerationist version); Variable Okun coefficients; Quadratic function; Unemployment; Construction sector; C52; E24; L74 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/s11294-014-9496-6

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