Milen Velev
Unemployment and economic growth
Číslo: 4/2018
Periodikum: Acta Oeconomica Pragensia
DOI: 10.18267/j.aop.609
Klíčová slova: unemployment rate, economic growth, Okun’s Law, European Union
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Anotace:
The aim of this paper is to investigate the relationship between unemployment and economic
growth in the European Union and in individual European countries. This allows to determine what
the effect on the unemployment rate will be when there is a change in output. The European Union
(28 countries) quarterly data used is for the period from 2000Q1 to 2017Q3. Regression analysis,
co-integration analysis and a vector error correction model have also been used. The relationship
between the unemployment rate and economic growth in the EU-28 for the period examined in this
study is less pronounced in comparison with the other countries. A negative relationship between
economic growth and a change in the unemployment rate is obtained for all the countries in the
European Union (28 countries). During each stage of the period studied, the effect of hysteresis on
the labour market grew. The results from the statistical analysis show that the data on economic
growth and the change in the rate of unemployment in the EU-28 are co-integrated. The validity
of Okun’s Law for the economy of the European Union is confirmed although during the period
studied the European economy went through several phases of the economic cycle.
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growth in the European Union and in individual European countries. This allows to determine what
the effect on the unemployment rate will be when there is a change in output. The European Union
(28 countries) quarterly data used is for the period from 2000Q1 to 2017Q3. Regression analysis,
co-integration analysis and a vector error correction model have also been used. The relationship
between the unemployment rate and economic growth in the EU-28 for the period examined in this
study is less pronounced in comparison with the other countries. A negative relationship between
economic growth and a change in the unemployment rate is obtained for all the countries in the
European Union (28 countries). During each stage of the period studied, the effect of hysteresis on
the labour market grew. The results from the statistical analysis show that the data on economic
growth and the change in the rate of unemployment in the EU-28 are co-integrated. The validity
of Okun’s Law for the economy of the European Union is confirmed although during the period
studied the European economy went through several phases of the economic cycle.