M. Sylvina Porras-Arena, Ángel L. Martín-Román, Diego Dueñas Fernández, Raquel Llorente Heras

Okun’s Law: The effects of the COVID-19 pandemic and the temporary layoffs procedures (ERTEs) on Spanish regions

Official statistics indicated a break in Okun’s law in all the Spanish regions due to the COVID-19 pandemic; however, herein, evidence of the validity of the law is shown. The temporary layoff procedures (ERTEs) allowed many workers to maintain their jobs. From the productive point of view, the law remained in effect in the regions, showing a strong relationship between idle labour resources and economic activity, and from the social point of view, the apparent breakdown of the law can be interpreted as the implementation of a policy that mitigated the dramatic impact of the economic crisis.

 

Keywords: Okun’s law; ERTE; expanded unemployment rate

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To cite this article

Porras-Arena, M. ; Martín-Román, . ; Dueñas Fernández, D. ; Llorente Heras , R. (2024). Okun’s Law: The effects of the COVID-19 pandemic and the temporary layoffs procedures (ERTEs) on Spanish regions. Investigaciones Regionales - Journal of Regional Research, 59, 105-125.