Is Okun’s Law Asymmetric: Evidence from Selected Asian Economies
Journal Title: Research Journal Social Sciences (Online) - Year 2016, Vol 5, Issue 2
Abstract
This study investigates the validity of Okun’s law for three groups of Asian Economies such as high income; upper middle income and lower middle income for the period of 1980-2009. We also investigate whether the labour markets are rigid or flexible in these economies over the sample period. The study finds a statistically significant relationship between cyclical output and cyclical unemployment; hence provides evidence on the existence of Okun’s law with higher coefficient for the case of lower middle economies as compared to other sample countries. The study also finds evidence of asymmetries with more worsening effects on unemployment during the recession in sample countries. Although the value of coefficient varies due to asymmetry but the variation is found to be small. This is one of the reasons financial crisis was not that severe in Asia as compared to other countries of the world.
Authors and Affiliations
FARHAT RASOOL, HASAN MUHAMMAD MOHSIN
Keywords
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