Okun's Law, Asymmetry Relationship and Jobless Growth in Turkey: Markov-Switching Approach

In this study, the relationship between growth and unemployment in Turkey economy was introduced under the Okun Law for the period between 1988 and 2008 empirically. The empirical method which was used in this study is Markov Regime Switching Model. Findings have shown that for explaining the relationship between variables techniques of classic and linear time series are inadequate. Because of this, to analyses these processes techniques of non-linear time series must be used. In this study we have concluded that Markov Regime Switching Model has more predominant results than linear models, the relationship between variables has asymmetric structure according to economy's growth and depression periods and our country's existing growth doesn't cause employment.