Okun's Law : Fit at 50? /

This paper asks how well Okun's Law fits short-run unemployment movements in the United States since 1948 and in twenty advanced economies since 1980. We find that Okun's Law isa strong and stable relationship in most countries, one that did not change substantiallyduring the Great Recessi...

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Bibliographic Details
Main Author: Ball, Laurence
Other Authors: Leigh, Daniel, Loungani, Prakash
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2013.
Series:IMF Working Papers; Working Paper ; No. 2013/010
Online Access:Full text available on IMF
Description
Summary:This paper asks how well Okun's Law fits short-run unemployment movements in the United States since 1948 and in twenty advanced economies since 1980. We find that Okun's Law isa strong and stable relationship in most countries, one that did not change substantiallyduring the Great Recession. Accounts of breakdowns in the Law, such as the emergence of'jobless recoveries,' are flawed. We also find that the coefficient in the relationship-the effect of a one percent change in output on the unemployment rate-varies substantially across countries. This variation is partly explained by idiosyncratic features of national labormarkets, but it is not related to differences in employment protection legislation.
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Physical Description:1 online resource (40 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Access:Electronic access restricted to authorized BRAC University faculty, staff and students