歐肯法則闡述了產出與失業之間負向的關係，自從歐肯發現這樣的抵換關係後，便開始有許多學者針對這樣的關係以不同國家為對象進行實證研究，在這眾多研究國家中都驗證了失業與產出的反向關係，唯獨中國的研究一直備受討論，因為過往許多的文獻認定中國的產出與失業違背歐肯法則。而針對中國歐肯的適用性，本篇研究認為中國這樣廣大領土的國家，各個省份之間難免存在不同的互動關係，這些互動關係可能使得中國存在空間外溢效果，假如沒有將這些外溢效果控制在估計模型中，便可能使得歐肯的估計產生偏誤。有鑒於此，本研究使用全區域空間相關性方法，證明了中國存在空間相關性，故本研究透過空間計量中的空間誤差模型將存在於中國的空間效果加以捕捉，並再次驗證歐肯法則於中國的適用性。研究結果發現顯著的歐肯係數，說明了控制資料當中的空間效果後，歐肯法則仍然適用於中國，意即中國的失業率對產出有負向的影響，由此可得知控制空間因素有助於解釋歐肯法則的存在性，雖然在結果中的歐肯係數值相較原始歐肯定律小，但其可能反映了中國的現況，中國高度的勞動參與率，以及大量穩定的FDI都可能是使得中國失業及產出關係較不強烈的原因。

Since the debut of Okun’s law, the negative link between output and unemployment has been verified in most countries. But the validity of Okun’s law for China remains controversial. With China’s vast territory, the spatial effect which may exist in China should not be neglected. We examine the inverse relationship between output and unemployment in China utilizing basic Okun model and spatial Okun model. This is the first time that Okun’s law for China is estimated using spatial framework. And we compare the results between basic and spatial Okun model. Our estimates include two important results. First, we prove the validity of Okun’s law in China implying that the negative relationship between output and unemployment occurs in China after accounting for the spatial spillovers. Secondly, the estimate shows statistically significant spatial dependence exist in error term. The magnitude of our Okun’s coefficient is lower than that of original Okun’s law. We think it is the stable FDI in China makes the weak connection between output and unemployment. With this argument, government’s reform agenda should include some transparent foreign investment policies to keep inflow of FDI stable and prompt China’s development.

Contents
Chapter 1 Introduction…………………………..……………………………………………………………….1
Chapter 2 Literature Review……………………………………………………………………………………5
Chapter 3 Data Sources………………………………..……………………………………………………….11
Chapter 4 Model Specifications…………………………………………………………………………18
4.1 Decomposition Methodology…………….……………………………………………………………18
4.2. Spatial Weight Matrix……………………………………………………………………………………19
4.3. Basic Empirical Analysis……………………………………………………………………………20
4.4. Spatial Okun Model……………………………………………………………………………………………20
4.4.1. Spatial Error Model……………………………………………………………………………………21
4.5 Data Examination……………………………………………………………………………………………………21
       4.5.1 Panel Unit Root Tests………………………………………………………………21
4.5.2 Moran’s I Test……………………………………………………………………………………………………23
Chapter 5 Empirical Results…………………………………………………………………………………24
5.1 Panel unit root test…………………………………………………………………………………………24
5.2 Moran’s I Test…………………………………………………………………………………………………………26
5.3 Estimate of Okun’s Law……………………………………………………………………………………27
5.4 Estimation of Spatial Error Model………………………………………………………29
Chapter 6 Conclusion……………………………………………………………………………………………………34
References………………………………………………………………………………………………………………………………36

List of Tables
Table 5.1 Results of Panel Unit Root Test………………………………………….25
Table 5.2 Results of Moran’s I Test……………………………………………………………27
Table 5.3 Estimation of basic non-spatial Okun’s Law………………28
Table 5.4 Estimation Results………………………………………………………………………………32



List of Figures
Figure 1.1 GDP growth and unemployment rate…………………………………………3
Figure 3.1 China’s regions………………………………………..…………………………………12
Figure 3.2 1997RGDP percentile……………………………………..……………13
Figure 3.3 2003RGDP percentile…………………………………….…………….13
Figure 3.4 2010RGDP percentile……………………………………..……………13
Figure 3.5 1997UR percentile……………………………………….……………..14
Figure 3.6 2003UR percentile………………………………………….…………..14
Figure 3.7 2010UR percentile………………………………………….…..………14
Figure 3.8 Graphs of real GDP and unemployment rate………….….15
Figure 5.1 China annual unemployment rate……………….….…………..….32
Figure 5.2 Amount of Foreign Direct Investment in China…….33

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