Research on a Regression Model for the Relationship between GDP and Unemployment: Evidence from China

Okun´s law postulates an inverse relationship between movement of the real gross domestic product (GDP) and movement of the unemployment. In the light of modern theoretical studies, this paper note investigates the relationship between GDP and unemployment in China through the implementation of Okun´s law over the period 1978-2006. The empirical research results reveal that Okun´s law can not be confirmed in China. In this paper, we apply Statistical Analysis System (SAS) to analyze, establish and optimize an regression model for the relationship between GDP and unemployment in China based on the effective utility of statistics acquired from 2005 Statistical Summary of China and the relative statistical site in Internet. Research shows that such an analysis and this regression model established and optimized for the relationship between GDP and unemployment could provide valuable information to policy makers in their efforts to adopt increasingly efficient economic policies against unemployment.