Okun's law: A rereading for Mexico, 1970-2004

Authors

  • Eduardo Loría Universidad Nacional Autónoma de México
  • Manuel G. Ramos Universidad Nacional Autónoma de México

DOI:

https://doi.org/10.24201/ee.v22i1.149

Keywords:

Okun’s law, structural time series models, Kalman filter, causality, cointegration

Abstract

We estimated the dynamic relationship between the unemployment rate and output for the Mexican Economy for annual data (1970-2004). We estimated three structural time series models by using the Kalman filter. We found a coefficient in the range 2.08-2.5. In order to avoid spuriousness, we proved for cointegration through the Johansen Procedure; finally, through the estimation of VAR’s we also proved that Granger causality runs in both senses in the three main Okun equations.

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Published

2007-01-01

How to Cite

Loría, E., & Ramos, M. G. (2007). Okun’s law: A rereading for Mexico, 1970-2004. Estudios Económicos De El Colegio De México, 22(1), 19–55. https://doi.org/10.24201/ee.v22i1.149

Issue

43-vol. 22, no. 1, january-june, 2007

Section

Articles