Work

Revisiting Okun's Law: Evidence from Malaysia

Year: 2024

Type: article

Abstract: Okun’s Law explains an inverse relationship between unemployment and GDP. To re-examine the validity of Okun’s Law to the Malaysian economy through the period of 1988 until 2021, this paper employed the Ordinary Least Squares (OLS) approach with several diagnostic tests. The findings indicate that there is a significant relationship between GDP and unemployment. The control variables - population, inflation rate, and FDI also significantly affect unemployment. While the country's GDP and inflation rate have a negative relationship with unemployment, population and FDI have a positive relationship with unemployment in Malaysia. Therefore, Okun’s Law is valid in the case of Malaysia.

Source: Information Management and Business Review

DOI: 10.22610/imbr.v16i3(i)s.4082

Authors: Syahira Nasir, Salwaty Jamaludin, Sharul Shahida Shakrein Safian, Nazurah Abdul Malek, Muhammad Ridzuan Abdul Aziz

Institutions: Universiti Teknologi MARA System, Universiti Teknologi MARA

Language: English

Topic: Unemployment and Economic Growth

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: diamond

OpenAlex ID: W4403274723

FWCI: 1.085

Cites:

Cited by: 3

Related to: 10