Investigating the Relationship between Unemployment Rate and Economic Growth Rate in Iran and Selected Countries

Abstract. According to a rule known as the Okan Law, for one percent decrease (increase) in the unemployment rate, the economic growth rate will increase (decrease) by approximately 0.3 percent. In other words, there is a negative relationship between the unemployment rate and the economic growth rate. This study examines the establishment of this relationship. Contrary to expectations, the relationship between these two variables is not fixed. To show this through the cross-correlation coefficient with different delays, the relationship between these two variables in Iran and 10 selected countries Germany, France, UK, USA, Mexico, Brazil, Malaysia, South Korea, Philippines and Turkey over a period of 30 years was examined and the result Showed that the correlation between these two variables has different patterns in different countries. In Iran and Germany, these two variables are correlated only in the long run.