Stability and asymmetry in Okun’s law: Evidence from Spanish regional data

Abstract

This paper analyzes Okun’s Law for Spain using regional data. The results confirm a very high Okun coefficient for Spain, with a high degree of regional heterogeneity. Furthermore, we find that panel data techniques provide notably more stable estimates than time series techniques applied to the same regional data. Finally, the results reveal a remarkable degree of regional heterogeneity in cyclical asymmetry in Okun’s Law for the Spanish case.

Keywords

• unemployment
• okun’s law
• economic cycles
• regional growth