Okun's Convergence within the U.S

This paper analyzes Okun's law for the states of the U.S. over the period 1978-2002. By using Geographically Weighted Regression, possible geographical interactions across the analyzed states are taken into account. There is evidence of time-varying Okun's coefficients in each state. Moreover, the empirical results are in favor of a convergence across the states in terms of Okun's coefficients, thus of the phrase, ldquo;Okun's convergencerdquo;. Finally, possible stability clubs for Okun's coefficients are also investigated, and it is found that ldquo;Okun's clustersrdquo; are also mostly geographical