### Abstract

Original language | English |
---|---|

Place of Publication | Glasgow |

Publisher | University of Strathclyde |

Pages | 1-29 |

Number of pages | 30 |

Volume | 13 |

Publication status | Published - 2013 |

### Fingerprint

### Keywords

- okun's law coefficient
- mra approach
- unemployment

### Cite this

*Okun's Law - a Meta Analysis*. (11 ed.) (pp. 1-29). Glasgow: University of Strathclyde.

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**Okun's Law - a Meta Analysis.** / Perman, Roger; Stephan, Gaetan ; Tavéra , Christophe.

Research output: Working paper › Discussion paper

TY - UNPB

T1 - Okun's Law - a Meta Analysis

AU - Perman, Roger

AU - Stephan, Gaetan

AU - Tavéra , Christophe

N1 - Published as a paper within the Discussion Papers in Economics, No. 13-11 (2013)

PY - 2013

Y1 - 2013

N2 - This paper seeks to identify whether there is a representative empirical Okun’s Law coefficient (OLC) and to measure its size. We carry out a meta regression analysis on a sample of 269 estimates of the OLC to uncover reasons for differences in empirical results and to estimate the ‘true’ OLC. On statistical (and other) grounds, we find it appropriate to investigate two separate subsamples, using respectively (some measure of) unemployment or output as dependent variable. Our results can be summarized as follows. First, there is evidence of type II publication bias in both sub-samples, but a type I bias is present only among the papers using some measure of unemployment as the dependent variable. Second, after correction for publication bias, authentic and statistically significant OLC effects are present in both sub-samples. Third, bias-corrected estimated true OLCs are significantly lower (in absolute value) with models using some measure of unemployment as the dependent variable. Using a bivariate MRA approach, the estimated true effects are -0.25 for the unemployment sub-sample and -0.61 for the output-sub sample; with a multivariate MRA methodology, the estimated true effects are -0.40 and -1.02 for the unemployment and the output-sub samples respectively.

AB - This paper seeks to identify whether there is a representative empirical Okun’s Law coefficient (OLC) and to measure its size. We carry out a meta regression analysis on a sample of 269 estimates of the OLC to uncover reasons for differences in empirical results and to estimate the ‘true’ OLC. On statistical (and other) grounds, we find it appropriate to investigate two separate subsamples, using respectively (some measure of) unemployment or output as dependent variable. Our results can be summarized as follows. First, there is evidence of type II publication bias in both sub-samples, but a type I bias is present only among the papers using some measure of unemployment as the dependent variable. Second, after correction for publication bias, authentic and statistically significant OLC effects are present in both sub-samples. Third, bias-corrected estimated true OLCs are significantly lower (in absolute value) with models using some measure of unemployment as the dependent variable. Using a bivariate MRA approach, the estimated true effects are -0.25 for the unemployment sub-sample and -0.61 for the output-sub sample; with a multivariate MRA methodology, the estimated true effects are -0.40 and -1.02 for the unemployment and the output-sub samples respectively.

KW - okun's law coefficient

KW - mra approach

KW - unemployment

M3 - Discussion paper

VL - 13

SP - 1

EP - 29

BT - Okun's Law - a Meta Analysis

PB - University of Strathclyde

CY - Glasgow

ER -