Research on the Nonlinear Link between Growth and Unemployment of China
Research on the Nonlinear Link between Growth and Unemployment of China
Author：Lin Xiumei, Wang Lei Journal：The Journal of Quantitative & Technical Economics Date：2007(6)
Keywords Economic Gowth；Empolyment；Nonlinear；Okun’S Law
Abstract
Using the Chinese annual data from 1978 to 2004，we extract the cy— clical output and cyclical registered urban unemployment rate by HP filter，and make threshold regression．The result implies that there is a nonlinear relationship between the GDP gap and the unemploym ent gap．W hen the economy is in a recession(defined as the negative output gap)，the coefficient of cyclical of output and cyclical of unemploym ent is negative．W hen the economy is in an expansion(defined as the positive output gap)，the coefficient of cyclical of output and cyclical of unemployment is positive，and growth of GDP has a positive effect on employment，and the rate of unemploym ent has statistically significant lag一2 autocorrelation．
Attachment
