Fitting Okun's law for the Swazi Kingdom: Will a nonlinear specification do?
Andrew Phiri ()
No 1829, Working Papers from Department of Economics, Nelson Mandela University
Despite Okun’s law being hailed one of the most fundamental pieces within macroeconomic policy paradigm, empirical evidence existing for the Kingdom of Swaziland remains virtually non-existent. Our study fills this void/hiatus in the literature by examining Okun’s law for the Swazi Kingdom by using the nonlinear autoregressive distributive lag (N-ARDL) model applied to data collected over 1991 to 2017. To ensure robustness of our empirical analysis, we further apply the Corbae-Oularis (C-O) filter to extract the gap variables required for empirical estimates. Remarkably, we find strong evidence for nonlinear Okun’s trade-off between unemployment and output growth in Swaziland with this trade-off being stronger during recessionary periods compared to expansionary periods. Much-needed policy enlightenment is drawn for Swazi authorities from our findings.
Keywords: Okun’s law; Nonlinear autoregressive distributive lag (N-ARDL) model; Swaziland; Sub-Saharan African (SSA) country; Corbae-Oularis filter. (search for similar items in EconPapers)
JEL-codes: C22 C32 E24 O40 (search for similar items in EconPapers)
Pages: 16 pages
New Economics Papers: this item is included in nep-ets and nep-mac
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http://repec.mandela.ac.za/RePEc/mnd/wpaper/paper.1829.pdf First version, 2018 (application/pdf)
Journal Article: Fitting Okun's law for the Swazi Kingdom: Will a nonlinear specification do? (2019)
Working Paper: Fitting Okun's law for the Swazi Kingdom: Will a nonlinear specification do? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:mnd:wpaper:1829
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