The Research on the Relationship between Economic Growth and Unemployment in Spain
DOI:
https://doi.org/10.54691/bcpbm.v40i.4365Keywords:
GDP; Inflation rate; Unemployment rate; regression model; Spain.Abstract
Spain’s economy is so volatile that unemployment is extremely high. What’s more, Spain has a dual labor market with many temporary contracts, which contributes to high unemployment. Thus, this study investigates the relationship between unemployment and GDP in Spain by implementing Okun's Law. Using annual data for the period 1972-2021, JMP was used to obtain a simple regression between unemployment rate and GDP and Inflation rate. Empirical results show that GDP is not related to unemployment. However, inflation is related to unemployment. Therefore, Okun’s law cannot be confirmed by Spain, and the lack of GDP does not explain Spain's unemployment problem.
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