Interpreting deviations from Okun’s Law
AbstractThe traditional relationship between unemployment and output growth known as Okun’s law appeared to break down during the Great Recession. This raised the question of whether this rule of thumb was still meaningful as a forecasting tool. However, recent revisions to GDP data show that its relation with unemployment followed a fairly typical cyclical pattern compared with past deep recessions and slow recoveries. The comparatively common patterns suggest that rumors of the death of Okun’s law during the Great Recession were greatly exaggerated.
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Bibliographic InfoArticle provided by Federal Reserve Bank of San Francisco in its journal FRBSF Economic Letter.
Volume (Year): (2014)
Issue (Month): ()
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- Edward S. Knotek & II, 2007. "How useful is Okun's law?," Economic Review, Federal Reserve Bank of Kansas City, issue Q IV, pages 73-103.
- John Fernald, 2014.
"Productivity and Potential Output Before, During, and After the Great Recession,"
NBER Working Papers
20248, National Bureau of Economic Research, Inc.
- John Fernald, 2014. "Productivity and Potential Output Before, During, and After the Great Recession," NBER Chapters, in: NBER Macroeconomics Annual 2014, Volume 29 National Bureau of Economic Research, Inc.
- John Fernald, 2012. "Productivity and potential output before, during, and after the Great Recession," Working Paper Series, Federal Reserve Bank of San Francisco 2012-18, Federal Reserve Bank of San Francisco.
- Fernald, John G., 2014. "Productivity and potential output before, during, and after the Great Recession," Working Paper Series, Federal Reserve Bank of San Francisco 2014-15, Federal Reserve Bank of San Francisco.
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