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Open Access research with a European policy impact...

The Strathprints institutional repository is a digital archive of University of Strathclyde's Open Access research outputs. Strathprints provides access to thousands of Open Access research papers by Strathclyde researchers, including by researchers from the European Policies Research Centre (EPRC).

EPRC is a leading institute in Europe for comparative research on public policy, with a particular focus on regional development policies. Spanning 30 European countries, EPRC research programmes have a strong emphasis on applied research and knowledge exchange, including the provision of policy advice to EU institutions and national and sub-national government authorities throughout Europe.

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Testing for convergence of the Okun's law coefficient in Europe

Perman, R.J. and Tavera, C. (2007) Testing for convergence of the Okun's law coefficient in Europe. Empirica, 34 (1). pp. 45-61. ISSN 0340-8744

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Abstract

Without convergence of macroeconomic parameters representative of the nature of adjustment mechanisms, even a common shock to members of a monetary union can lead to different macroeconomic consequences across the union and, eventually, to the need for more or less co-ordinated specific policies. In this paper, we test for the presence of convergence of the Okun's Law coefficient (OLC) among several alternative groupings of European economies. The empirical strategy adopted is based on the evaluation of the time path of rolling regression estimates of the OLC for European countries. We then use a testing procedure suggested by Evans [Evans P (1996) J Econ Dynam Control 20:1027-1049] to investigate the convergence, or non-convergence, of the OLC in several groups of European countries by examining how the cross-country variance of the OLC evolves over time in these groups. A hypothesis of medium-term convergence of the OLC is rejected for most of the European country groups examined.