ScholarLens Back to search
2013•Unpublished venueRequires access

Okun's law and its validity in Egypt

Hany Elshamy

Open publisher page 3 citations

Abstract

Okun’s law is a key relationship in microeconomics and finds that the relationship implies that a GDP growth by 3% leads to 1% decrease in unemployment Okun (1970). Recently, many studies find that the relationship between GDP and unemployment is not 3% as Okun’s law suggests but sometimes it is between 2.5% and 2% (Samuelson and Nordhaus, 1995). This paper tests Okun’s coefficient in Egypt. The paper uses co-integration analysis to estimate Okun’s coefficient in the long run. and in the short run by using the Error Correction Mechanism (ECM). The analysis depends on annual data from the International Financial Statistics (IFS) published by the IMF for the period 1970-2010. When Okun’s law was estimated in Egypt in the long run and short run the coefficient was statically significant with the expected sign.

About this research paper

What this paper is about

Okun’s law is a key relationship in microeconomics and finds that the relationship implies that a GDP growth by 3% leads to 1% decrease in unemployment Okun (1970). Recently, many studies find that the relationship between GDP and unemployment is not 3% as Okun’s law suggests but sometimes it is between 2.5% and 2% (Samuelson and Nordhaus, 1995). This paper tests Okun’s coefficient in Egypt. The paper uses co-integration analysis to estimate Okun’s coefficient in the long run. and in the short run by using the Error Correction Mechanism (ECM). The analysis depends on annual data from the International Financial Statistics (IFS) published by the IMF for the period 1970-2010. When Okun’s law was estimated in Egypt in the long run and short run the coefficient was statically significant with the expected sign.

Why it matters

OpenAlex reports 3 citations for this work. Citation counts describe recorded attention and do not establish research quality.

Key contribution

A contribution statement is not available in the OpenAlex record.

Method / approach

Method details are not available in the OpenAlex metadata.

Main findings

Findings are not separately available in the OpenAlex metadata.

Limitations

Limitations are not available in the OpenAlex metadata.

Applications

Application details are not available in the OpenAlex metadata.

Available abstract

Okun’s law is a key relationship in microeconomics and finds that the relationship implies that a GDP growth by 3% leads to 1% decrease in unemployment Okun (1970). Recently, many studies find that the relationship between GDP and unemployment is not 3% as Okun’s law suggests but sometimes it is between 2.5% and 2% (Samuelson and Nordhaus, 1995). This paper tests Okun’s coefficient in Egypt. The paper uses co-integration analysis to estimate Okun’s coefficient in the long run. and in the short run by using the Error Correction Mechanism (ECM). The analysis depends on annual data from the International Financial Statistics (IFS) published by the IMF for the period 1970-2010. When Okun’s law was estimated in Egypt in the long run and short run the coefficient was statically significant with the expected sign.

Key concepts: Okun's law, Economics, Unemployment, Econometrics, Real gross domestic product, Sign (mathematics), Short run, Unemployment rate

Related papers

Related paper 1Related paper 2Related paper 3
Back to paper searchBrowse research topicsOriginal source
Okun's law and its validity in Egypt — Research Paper | ScholarLens