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Okun’s Law and Phillips Curve Revisited: Nonlinear Evidence From the Moroccan Economy

Year: 2025

Type: article

Abstract: This study examines the validity of Okun’s Law and the Phillips Curve in Morocco within a nonlinear framework, aiming to explain persistent unemployment despite sustained growth. Using annual data from 1981–2024 applying NARDL models, the analysis reveals asymmetric relationships among investment, inflation, growth, and unemployment. Negative shocks in investment and output significantly raise unemployment, while positive shocks yield weaker effects, confirming partial validity of Okun’s Law but rejecting the Phillips Curve. Results highlight Morocco’s structural rigidities and suggest policy measures promoting inclusive, labor-intensive investment and countercyclical strategies to mitigate adverse shocks and foster sustainable employment.

Source: DOAJ (DOAJ: Directory of Open Access Journals)

Authors: IBNOUZAHIR YOUSSEF, HERRAZ ISMAIL, BASSITE IMAD, ELKHATTAB YOUNES, HEFNAOUI AHMED

Institution: University of Hassan II Casablanca

Language: English

Topic: Unemployment and Economic Growth

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, No poverty

Open Access status: green

OpenAlex ID: W7126132828

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