Okun's law in Mexico: employment without economic growth?
DOI:
https://doi.org/10.30973/inventio/2023.19.49/5Keywords:
Okun’s coefficient, GDP growth, unemployment rate, productivityAbstract
The text explains the relationship between economic growth and job creation. It uses the Okun equation of “first differences” and quarterly data of the Mexican economy from 2005 to 2023. The results show that the sensitivity of the unemployment rate to changes in production (the Okun’s coefficient) is 0.1550, quite lower than that reported for the United States economy. In addition, the GDP growth rate from which unemployment begins to decline is 1.57%. Unemployment tends to raise with lower growth rates. Therefore, we conclude that slow economic growth is not enough to reduce unemployment.
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