Asymmetry Relationship between Economic Growth and Unemployment Rates in the Arab countries: Application of the OKUN Law during 1960-2017

Louail Bilal and Ben Haj Hamida Hayet
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Louail Bilal: Ph.D., College of Business Administration, Northern Border University, Arar, Saudi Arabia and Faculty of Economic, Commercial and Management Sciences, University of M’Hamed BOUGARA Boumerdes, Algeria
Ben Haj Hamida Hayet: Ph.D., Univ. Carthage, Institut des Hautes Etudes Commerciales de Carthage (IHEC), Tunisia and Univ. Tunis El Manar, Faculté des Sciences Economiques et de Gestion de Tunis (FSEGT), Prospective, Stratégies et Développement Durable Laboratory (PS2D), Tunisia

Management, 2021, vol. 25, issue 2, 1-21

Abstract: A well-known macroeconomic relationship is called the OKUN Law, which states that the negative correlation between unemployment rates and raw domestic output can be determined. This study will focus on the theoretical framework for developing models of the relationship between economic growth and unemployment rates. This study contributes to the existing literature by estimate Okun’s law for Arab economies during the period 1960–2017. The results of this study indicate that Okun’s coefficient is valid for the case of Arab countries in the different version, when unemployment rates reach the threshold and are between 6.35 and 7.933, in which the impact of the GDP on unemployment rates is negative and significant, with a significant level of 1 per cent. As for outside the threshold, i.e. less than 6.35 and more significant than 7.933, this effect is negative, but it is not significant.

Keywords: OKUN Law; Gross Domestic Product; Unemployment Rate; Arab Countries (search for similar items in EconPapers)
JEL-codes: C2 J3 O4 P41 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:vrs:manmen:v:25:y:2021:i:2:p:1-21:n:8

DOI: 10.2478/manment-2019-0070

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