Özgür Bayram Soylu

Department of Economics, Hacettepe University,

Turkey

soylu@hacettepe.edu.tr

Economic growth and unemployment issue: Panel data analysis in Eastern European Countries

İsmail Çakmak

Department of Economics, Hacettepe University,

Turkey

ismailcakmak@hacettepe.edu.tr

Fatih Okur

Department of Economics, Hacettepe University,

Turkey

fatih.okr@hacettepe.edu.tr

Abstract. The concepts of economic growth and unemployment are at the beginning of the most important variables in the sense that all economies are choosing and implementing economic policies. The purpose of this study to investigate the relation between economic growth and unemployment in Eastern European Countries for the period of 1992-2014 within panel data framework. In this paper this relationship has been examined in the context of Okun’s Law. Panel Unit Root, Pooled Panel OLS and Panel Johansen Co-integration tests are applied respectively. The results show that the economic growth and unemployment series are stationary at first level, unemployment affected positively by economic growth, in other words 1% rise in GDP will fall the unemployment rate by 0.08% because of Okun’s coefficient for Eastern European Countries and there is a co-integration between these important macroeconomic variables.

Received: August, 2017

1st Revision: November, 2017

Accepted: December, 2017

DOI: 10.14254/2071-8330.2018/11-1/6

JEL Classification: E10, E24, O47, O52

Keywords: Okun’s law, panel cointegration, unemployment, GDP, Eastern European Countries