Commuting effects in Okun's Law among British areas : evidence from spatial panel econometrics

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Palombi, Silvia and Perman, Roger and Tavéra, Christophe (2017) Commuting effects in Okun's Law among British areas : evidence from spatial panel econometrics. Papers in Regional Science, 96 (1). pp. 191-209. ISSN 1056-8190 (https://doi.org/10.1111/pirs.12166)

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Abstract

This paper examines Okun's Law using a spatial panel approach on NUTS 3 data for Great Britain over the period 1985–2011. The basic specification used as a starting point for the spatial analysis is the relationship between real output growth and unemployment rate changes. This is extended to incorporate spatial lags, to test for the presence of commuting effects, and to accommodate spatial residuals dependence. We estimate various spatial panel models, controlling for heterogeneity across areas, and find consistent evidence of a significant Okun's coefficient. Results also show that spillover effects from labour mobility and interregional linkages matter and have important implications for the validity of the empirical law.

ORCID iDs

Palombi, Silvia ORCID logoORCID: https://orcid.org/0000-0003-4281-3491, Perman, Roger ORCID logoORCID: https://orcid.org/0000-0002-6862-7462 and Tavéra, Christophe;
  • Item type:Article
    ID code:53793
    Dates:
    Date
    Event
    1 March 2017
    Published
    13 March 2015
    Published Online
    20 January 2015
    Accepted
    Subjects:Social Sciences > Economic Theory
    Department:Strathclyde Business School > Economics
    Depositing user: Pure Administrator
    Date deposited:21 Jul 2015 09:39
    Last modified:11 Nov 2024 10:56
    URI:https://strathprints.strath.ac.uk/id/eprint/53793
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