How credible are Okun coefficients? The gap version of Okun?s law for G7 economies

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F44555601%3A13440%2F23%3A43897926" target="_blank" >RIV/44555601:13440/23:43897926 - isvavai.cz</a>

Result on the web

<a href="https://link.springer.com/article/10.1007/s10644-022-09438-9" target="_blank" >https://link.springer.com/article/10.1007/s10644-022-09438-9</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.1007/s10644-022-09438-9" target="_blank" >10.1007/s10644-022-09438-9</a>

Result language

angličtina

Original language name

How credible are Okun coefficients? The gap version of Okun?s law for G7 economies

Original language description

The paper draws attention to the fact that findings that follow from estimation of Okun&apos;s law are extremely sensitive to methodological choices. The argument rests in a case study oriented upon G7 countries for a period 1991/Q1-2021/Q4 and accounts for a possible asymmetry in the output-unemployment relationship. First, business and unemployment fluctuations are estimated by six purely statistical approaches that arise by casting the Hodrick-Prescott filter, the Hamilton filter and the unobserved component model into a univariate or bivariate framework. Second, the gap version of Okun&apos;s law is modelled by means of an auto-regressive distributed lag model or its nonlinear threshold counterpart according as asymmetry is allowed or not. The results indicate huge heterogeneity in Okun coefficients for every country caused by differences even in the basal methodological aspects accounted for in the case study. The diversity of results demonstrates that initial modelling choices may provide economic policy-makers with conflicting insights and advice. This issue follows merely from the absence of general standards that might decide which particular result is more credible.

Czech name

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Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

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OECD FORD branch

10103 - Statistics and probability

Project

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Continuities

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year

2023

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Economic Change and Restructuring

ISSN

1573-9414

e-ISSN

1574-0277

Volume of the periodical

56

Issue of the periodical within the volume

3

Country of publishing house

US - UNITED STATES

Number of pages

48

Pages from-to

1467-1514

UT code for WoS article

000911276600001

EID of the result in the Scopus database

2-s2.0-85145934727