Unemployment forecasts, time varying coefficient models and the Okun’s law in Spanish regions


  • Miquel Clar-Lopez AQR-IREA, Universitat de Barcelona
  • Jordi López-Tamayo AQR-IREA, Universitat de Barcelona
  • Raúl Ramos AQR-IREA, Universitat de Barcelona http://orcid.org/0000-0003-0047-0793




During the Great Recession, output and unemployment responses have differed markedly across Spanish regions. Our objective is to evaluate the relative accuracy of forecasting models based on the Okun’s law compared to alternative approaches. In particular, we want to analyse if a time varying coefficient specification of the Okun’s law provide better forecasts than alternative models in two different periods: a first period from 2002 to 2007 characterized by sustained economic growth in all provinces, and a second period from 2008 to 2013 characterized by the impact of the Great Recession. The obtained results allow us to conclude that, in general, the use of these models improve the forecasting capacity in most regions, but do not provide reliable forecast.

Author Biographies

Miquel Clar-Lopez, AQR-IREA, Universitat de Barcelona

Associate Professor, Departament d'Econometria, Estadística i Economia Espanyola de la Universitat de Barcelona (UB)

Jordi López-Tamayo, AQR-IREA, Universitat de Barcelona

Associate Professor, Departament d'Econometria, Estadística i Economia Espanyola de la Universitat de Barcelona (UB)

Raúl Ramos, AQR-IREA, Universitat de Barcelona

Associate Professor, Departament d'Econometria, Estadística i Economia Espanyola de la Universitat de Barcelona (UB)


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How to Cite

Clar-Lopez, M., López-Tamayo, J., & Ramos, R. (2014). Unemployment forecasts, time varying coefficient models and the Okun’s law in Spanish regions. Economics and Business Letters, 3(4), 247–262. https://doi.org/10.17811/ebl.3.4.2014.247-262