GDP and Unemployment rate

We recived yearly data on GDP on a kreis level, and investigated the relationship it has to unemployment rate in a kreis level.

Okun's law

Okun's law describes the relationship between changes in unemployment and changes in GDP. It assumes that the change in the unemployment rate, is approximately equal to 0. It also assumes that the relative employment rate change, is approximately constant. Unfortunately, these assumptions don't hold in our data.