Test of Okun’s Law in Some Asian Countries Co-Integration Approach

Irfan Lal (), Sulaiman D. Mohammad, Adnan Hussain and Anwar Jalil

MPRA Paper from University Library of Munich, Germany

Abstract: The objective of this paper is to estimate the Okun’s coefficient, and to check the validity of Okun’s law in some Asian countries1 whether it is valid or not, for this purpose we have used the time series annual data during the period 1980-2006. Engle Granger's (1987) co-integration technique is employed to find out the long run association between variables and an error correction mechanism (ECM) is used for short run dynamic. After getting empirical evidence it can be said that Okun’s law interpretation may not be applicable and also the principle of NAIRU does not hold its validity in some Asian developing countries. Our results have also supported to Noble Prize awarded economist Paul Krugman.

Keywords: Okun’s law; Validity; cointegration (search for similar items in EconPapers)
JEL-codes: C4 C40 E01 (search for similar items in EconPapers)
Date: 2012-01-01
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in European Journal of Scientific Research ISSN 1450-216X 1.40(2010): pp. 73-80

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/106934/1/MPRA_paper_106934.pdf original version (application/pdf)

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:pra:mprapa:106934

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().