Abstract
Today unemployment is a problem faced by many countries. It aggravated further when
recession hit the globe in 2008-2009. Many countries are still unable to bring unemployment
level to normal levels and struggling hard to bring economy back on track. The output
- unemployment relationship was postulated by Arthur Okun in 1962 which led to famous
Okun's Law. The research is aimed at finding Okun Co-efficient and to verify the findings
of this Law for the case of Pakistan economy. Annual Time series from 1985 to 2010
on unemployment and GDP was used for data analysis. Data was examined for CLRM
conditions and Hodrick Prescot filter approach is used in gap model to examine direction
and long run relationship between unemployment and GDP. This paper will be helpful
for stakeholders in policy making and can be used for further analysis for cross country
comparison(s) using panel data.
Abdul Rahim Batavia, Muhammad Abdus Salam. (2012) Relationship between Unemployment and Gross Domestic Product: Evidence from Pakistan using Okun's Law, Journal of Independent Studies and Research-Management, Social Sciences and Economics, Volume-10, Issue-1.
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