The Validity of Okun¡¯s Law in North Macedonia

Despina Tumanoska ()

Business and Economic Research, 2019, vol. 9, issue 2, 160-168

Abstract: This paper investigates the relationship between unemployment rates (youth and total) and GDP growth in North Macedonia, within the context of Okun¡¯s Law. The econometric analysis of the paper is based on The Auto-regression Distributed Lags Model, using data for the period 1991-2017 collected from different data basis. The econometric analysis suggests that there is a statistically significant long-run relationship between the GDP growth and total unemployment in North Macedonia, at the 1% level of probability. In particular, the findings show that a 1% increase in the economic growth will lead to decrease of the total unemployment for 2.57%. No short- or long-run relationship between GDP growth and youth unemployment was detected.

Keywords: Okun¡¯s law; Unemployment; Youth unemployment; Economic output; North Macedonia (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:mth:ber888:v:9:y:2019:i:2:p:160-168

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