The Diversity of Okun's Coefficient in the Regions of Poland

Abstract

In the paper we calculate the Okun's coefficient in the regions of Poland. We compare the coefficients calculated for each region separately with the estimations from seemingly unrelated regressions (SUR) models. We argue that the second method gives a better estimate, because shocks in output are highly correlated across regions. Then we search in the Polish regions for the clubs consisting of regions with equal Okun's coefficients, what indicates the similarity in the macroeconomic structure and labor market. We find two such clubs: northwest of Poland and the eastern border. Finally, we draw some conclusions concerning economic policy in working against unemployment.