Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/305556 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11314
Publisher: 
CESifo GmbH, Munich
Abstract: 
This paper provides new estimates of Okun’s unemployment-output relationship in euro area countries between 1979 and 2019. We find our structural estimates are stable but substantially lower than the reduced-form estimates that tend to characterise the literature and that the responsiveness of output to unemployment is driven by idiosyncratic factors in both euro core and periphery countries. The results are robust to conditioning on wage bargaining institutional set-ups and, yet, in the euro periphery, we find product market regulation as playing a major role in explaining the significance of Okun’s law estimates across countries.
Subjects: 
economic growth
unemployment
Okun’s Law
panel VAR
JEL: 
E24
E32
J64
G01
Document Type: 
Working Paper
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