Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/303458 
Year of Publication: 
2022
Series/Report no.: 
LEQS Paper No. 175
Publisher: 
London School of Economics and Political Science (LSE), European Institute, London
Abstract: 
This paper studies the unemployment-output relationship from 1979 to 2019 in advanced countries. The paper offers three main contributions: it reports (i) structural and (ii) dynamic estimates that (iii) account for idiosyncratic and common shocks in a Structural Panel-VAR framework. The main results show that unemployment responses to output (Okun's Law estimates) are stable and have not changed significantly since the Global Financial Crisis. We also find they are driven by common shocks in both core and peripheral countries. Yet the post-crisis stability results for the periphery require extra-model explanations chiefly via strictness of product market regulations.
Subjects: 
Economic growth
unemployment
Okun's Law
Panel VAR
Document Type: 
Working Paper

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