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Employment, unemployment and real economic growth

Ivan Kitov () and Oleg Kitov ()

MPRA Paper from University Library of Munich, Germany

Abstract: We have modeled the employment/population ratio in the largest developed countries. Our results show that the evolution of the employment rate since 1970 can be predicted with a high accuracy by a linear dependence on the logarithm of real GDP per capita. All empirical relationships estimated in this study need a structural break somewhere between 1975 and 1995. Such breaks might be caused by revisions to monetary policy (e.g. inflation targeting) or/and changes in measurement units. Statistically, the link between measured and predicted rate of employment is characterized by the coefficient of determination from 0.84 (Australia) to 0.95 (Japan). The model residuals are likely to be associated with measurement errors.

Keywords: employment; unemployment; real GDP; modeling; Okun’s law (search for similar items in EconPapers)
JEL-codes: E24 J21 (search for similar items in EconPapers)
Date: 2011-07-24
New Economics Papers: this item is included in nep-lab and nep-mac
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Working Paper: Employment, unemployment and real economic growth (2011) Downloads
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