Share:


Research of the impact of business cycles on the unemployment in the countries of the European Union

Abstract

This paper examines the impact of business cycles on unemployment rates in EU countries. The relationship between changes in gross domestic product and changes in the unemployment rate is referred to in the academic literature as Okun’s law. This law is of particular importance and the relationship has been extensively investigated in the scientific literature, but there are not many studies that analyse the European Union countries. This paper examines the relationship between the unemployment rate and real GDP in the EU-27. The data used for the study cover the period 2007–2019. The results of a correlation regression analysis provide evidence of the inverse relationship between the unemployment rate and real GDP as established by theory. The results also show that the relationship between business cycles and unemployment varies from country to country: in Lithuania and the UK, there is a very strong inverse relationship between the unemployment rate and real GDP. In Lithuania, the coefficient was –0.9377, and a similar coefficient was found in the United Kingdom (–0.9337).


Article in Lithuanian.


Verslo ciklų poveikio nedarbui tyrimas Europos Sąjungos šalyse


Santrauka


Straipsnyje nagrinėjamas verslo ciklų poveikis nedarbo lygiui ES šalyse. Priklausomybė tarp bendrojo vidaus produkto ir nedarbo lygio pokyčių mokslinėje literatūroje yra įvardijama kaip Okuno dėsnis. Šis dėsnis pasižymi ypatinga svarba, todėl mokslinėje literatūroje šis ryšys yra plačiai ištirtas, tačiau tyrimų, kuriuose būtų analizuojamos Europos Sąjungos šalys, nėra daug. Šiame straipsnyje yra nagrinėjamas nedarbo lygio ir realiojo BVP ryšys 27 ES šalyse. Tyrimui naudojami 2007–2019 m. duomenys. Atlikus koreliacinę regresinę analizę, gauti rezultatai įrodė teorijoje nustatytą atvirkštinį ryšį tarp nedarbo lygio ir realiojo BVP. Taip pat gauti rezultatai rodo, jog ryšys tarp verslo ciklų ir nedarbo yra skirtingas atsižvelgiant ir į analizuojamą šalį: Lietuvoje ir Jungtinėje Karalystėje nustatytas labai stiprus atvirkštinis ryšys tarp nedarbo lygio ir realiojo BVP. Lietuvoje koeficiento reikšmė siekė –0,9377, taip pat panaši koeficiento reikšmė gauta ir Jungtinėje Karalystėje (–0,9337).


Reikšminiai žodžiai: verslo ciklas, nedarbo lygis, Europos Sąjungos šalys, koreliacinė regresinė analizė, realusis bendrasis vidaus produktas.

Keyword : business cycle, unemployment rate, European Union countries, correlation regression analysis, real gross domestic product

How to Cite
Krilytė, K., & Matuzevičiūtė-Balčiūnienė, K. (2022). Research of the impact of business cycles on the unemployment in the countries of the European Union. Mokslas – Lietuvos Ateitis / Science – Future of Lithuania, 14. https://doi.org/10.3846/mla.2022.15812
Published in Issue
Mar 17, 2022
Abstract Views
485
PDF Downloads
424
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

References

Behun, M., Gavurova, B., Tkacova, A., & Kotaskova, A. (2018). The impact of the manufacturing industry on the economic cycle of European Union countries. Journal of Competitiveness, 10(1), 23–39. https://doi.org/10.7441/joc.2018.01.02

Beržinskienė, D. ir Reizgevičienė, R. (2013). Ekonominių ciklų poveikis Europos Sąjungos darbo rinkos rodikliams. Ekonomika ir vadyba: aktualijos ir perspektyvos, 4(32), 61–72.

Blázquez-Fernández, C., Cantarero-Prieto, D., & Pascual-Sáez, M. (2018). Okun’s law in selected European countries (2005-2017): An age and gender analysis. Economics and Sociology, 11(2), 263–274. https://doi.org/10.14254/2071-789X.2018/11-2/18

Bloom, N., Floetotto, M., Jaimovich, N., Saporta-Eksten, I., & Terry, S. J. (2018). Really uncertain business cycles. Econometrica, 86(3), 1031–1065. https://doi.org/10.3982/ecta10927

Čiegis, R., Nakčiūnaitė, E., & Mikalauskienė, A. (2013). Dependence between labour market and economic cycles. Engineering Economics, 24(4), 320–330. https://doi.org/10.5755/j01.ee.24.4.2898

Economou, A., & Psarianos, I. N. (2016). Revisiting Okun’s Law in European Union countries. Journal of Economic Studies, 43(2), 275–287. https://doi.org/10.1108/JES-05-2013-0063

Eurostat. (2021). Real GDP growth rate - volume. https://ec.europa.eu/eurostat/web/products-datasets/-/tec00115&lang=en

Evci, S., & Sharma, A. (2020). Studies at the crossroads of management & economics. IJOPEC Publication.

Flórez, L., Pulido-Mahecha, K., & Ramos-Veloza, M. (2018). Okun’s law in Columbia: A non-linear cointegration approach (Working Paper No. 1039). Banco de la República, Colombia. https://doi.org/10.32468/be.1039

Furceri, D., Jalles, J. T., & Loungani, P. (2020). On the determinants of the Okun’s law: New evidence from time-varying estimates. Comparative Economic Studies, 62, 661–700. https://doi.org/10.1057/s41294-019-00111-1

Gogtay, N. J., Deshpande, S. P., & Thatte, U. M. (2017). Principles of regression analysis. Journal of Association of Physicians of India, 65, 48–52.

Grant, A. L. (2018). The great recession and Okun’s law. Economic Modelling, 69, 291–300. https://doi.org/10.1016/j.econmod.2017.10.002

Jones, S., & Wang, T. (2019). Predicting private company failure: A multi-class analysis. Journal of International Financial Markets, Institutions and Money, 61, 161–188. https://doi.org/10.1016/j.intfin.2019.03.004

Kozlowski, D. (2019). Old series, new signals: The economic cycle in light of wavelet analysis. Cuadernos del CIMBAGE, 21, 173–200.

Laskienė, D. (2009). Nedarbo lygio ir gamybos augimo ryšys: Lietuvos atvejis. Ekonomika ir vadyba, 14, 857–862. http://etalpykla.lituanistikadb.lt/fedora/objects/LT-LDB-0001:J.04~2009~1367168422010/datastreams/DS.002.0.01.ARTIC/content

LeBlanc, V., & Cox, M. A. A. (2017). Interpretation of the point-biserial correlation coefficient in the context of a school examination. The Quantitative Methods for Psychology, 13(1), 46–56. https://doi.org/10.20982/tqmp.13.1.p046

Levine, L. (2013). Economic growth and the unemployment rate (CRS Report for Congress). Congressional Research Service.

Omoshoro-Jones, O. S. (2021). Asymmetry in Okun’s law revisited: New evidence on cyclical unemployment–cyclical output trade-off in the Free State Province using NARDL model (MPRA Paper). https://mpra.ub.uni-muenchen.de/107126/

Organisation for Economic Co-operation and Development. (2020). Average annual wages. https://stats.oecd.org/Index.aspx?DataSetCode=AV_AN_WAGE#

Pabedinskaitė, Č. R. (2016). Kiekybiniai modeliavimo metodai. Technika. https://doi.org/10.20334/1563-S

Porras-Arena, S., & Martín-Román, Á. (2019). Self-employment and the Okun’s law. Economic Modelling, 77, 253–265. https://doi.org/10.1016/j.econmod.2018.09.006

Reizgevičienė, R. ir Beržinskienė, D. (2013). Ekonominių ciklų įtakos nedarbo lygiui ES šalyse asimetrija. Ekonomika ir vadyba: aktualijos ir perspektyvos, 2(30), 97–103.

Senthilnathan, S. (2019). Usefulness of correlation analysis. https://doi.org/10.2139/ssrn.3416918

Slavinskaitė, N., Koniuhovaitė, R. ir Stanislovaitytė, E. (2017). Nedarbo lygio poveikio bendrajam vidaus produktui Baltijos šalyse analizė. Iš Lietuvos jaunųjų mokslininkų konferencijos „Mokslas – Lietuvos ateitis“ (p. 1–10), Vilnius, Lietuva. https://doi.org/10.3846/vvf.2017.005

Tang, B., & Bethencourt, C. (2017). Asymmetric unemployment-output tradeoff in the Eurozone. Journal of Policy Modeling, 39(3), 461–481. https://doi.org/10.1016/j.jpolmod.2017.01.003

Tauraitė, V. (2017). Darbo rinkos konjunktūros vertinimas Europos Sąjungos šalyse. Lietuvos statistikos darbai, 56(1), 41–52.

Walters, E. T. (2020). Impact of advancement in technology, false conclusion of real estate bubble, record low mortgage delinquency, irresponsible media, U.S. economic policy disaster: Evidence supporting eddison walters risk expectation theory of the global financial crisis of 2007 and 2008. International Business Research, 13(7), 224–235. https://doi.org/10.5539/ibr.v13n7p224

Zerbo, A. (2018). A theorem for Okun’s law. Université Montesquieu-Bordeaux.