The Relationship between Unemployment and Output Cycles in Korea

by CARAIANI, Petre
Published in Romanian Journal of Economic Forecasting, volume 7 issue 1
, 2006.

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This paper** addresses the problem of Okun's coefficient for the Korean economy. By running regressions between the unemployment and employment variables cycles and the economic activity cycles, I find that Okun's Law has held in Korea in the last decades. At the same time, the results indicate a rather low response of the labor market to the changing conditions in the economy, suggesting a higher than average degree of labor market rigidity.
** This is a simplified version of the author's MA thesis submitted to the Graduate School of Pan-Pacific International Studies, Kyung Hee University, Seoul, Korea, as a requirement for the Degree of Master of Arts in International Trade and Economic Cooperation, year 2005. 

Keywords: Okun's Coefficient, Unemployment, Business Cycles, Korea.

JEL Classification: E24, E32