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

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

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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
      Keywords:unemployment, spatial, commuting, output growth, Economic Theory, Environmental Science (miscellaneous), Geography, Planning and Development
      Subjects:Social Sciences > Economic Theory
      Department:Strathclyde Business School > Economics
      Depositing user: Pure Administrator
      Date deposited:21 Jul 2015 09:39
      Last modified:12 Jul 2021 08:05
      URI:https://strathprints.strath.ac.uk/id/eprint/53793
    CORE (COnnecting REpositories)