Empirical analysis of economic performance and metal prices in Peru using svar and okun's law

Carlos David Cardona-Arenas (), Daniel Osorio-Barreto () and Diego Alejandro Manrique ()
Additional contact information
Carlos David Cardona-Arenas: Universidad de Manizales
Daniel Osorio-Barreto: Universidad Nacional de Colombia
Diego Alejandro Manrique: Luis Amigó University

Mineral Economics, 2025, vol. 38, issue 1, No 1, 20 pages

Abstract: Abstract Observing the growth and improvements in the Peruvian labor market over the past 27 years, this study aims to test the validity of Okun's Law hypothesis for Peru during the period 1992–2019. To achieve this, a novel methodology is proposed, which involves calculating the production gap and unemployment gap. Firstly, a proxy variable for the time-varying natural rate of unemployment and a measure of potential output are calculated, both following the methodological approach suggested by the literature. Subsequently, a structural vector autoregressive model (S-VAR) is estimated to capture the lagged effects of Okun's theoretical relationship. The main findings of the study suggest that shocks in the precious metal price index impact both the production gap and the unemployment gap, confirming that the international dynamics of precious metal prices play a crucial role in economic performance when analyzed from the perspective of Okun's Law. This article demonstrates, in the context of a Latin American country, that Okun's law can be fulfilled by considering a fundamental analysis of the determinants of economic growth.

Keywords: SVAR; Product gap; Unemployment gap; Commodities; Okun's Law (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s13563-024-00434-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:minecn:v:38:y:2025:i:1:d:10.1007_s13563-024-00434-1

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/13563

DOI: 10.1007/s13563-024-00434-1

Access Statistics for this article

Mineral Economics is currently edited by Magnus Ericsson and Patrik Söderholm

More articles in Mineral Economics from Springer, Raw Materials Group (RMG), Luleå University of Technology
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().