Dynamics of Output and Employment in the U.S. Economy
AbstractThis paper investigates the changing relationship between employment and real output in the U.S. economy from 1948 to 2010 both at the aggregate level and at some major industry-grouping levels of disaggregation. Real output is conventionally measured as value added corrected for price inflation, but there are some industries in which no independent measure of value added is possible and existing statistics depend on imputing value added to equal income. Indexes of output that exclude these imputations are closely correlated with employment over the whole period, and remain more closely correlated during the current business cycle. This analysis o ffers insights into deeper structural changes that have taken place in the U.S. economy over the past few decades in a context marked by the following three factors: (i) the service (especially the financial) sector has grown in importance, (ii) the economy has become more globalized, and (iii) the policy orientation has increasingly become neoliberal. We demonstrate an economically signi ficant reduction in the coefficient relating employment growth to output growth over the business cycles since 1985. Some of this change is due to sectoral shifts toward services, but an important part of it reflects a reduction in the coefficient for the goods and material value-adding sectors.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Political Economy Research Institute, University of Massachusetts at Amherst in its series Working Papers with number wp248.
Date of creation: 2011
Date of revision:
Okun's Law; Kaldor-Verdoorn E ect; Global restructuring; measurement of real output;
Other versions of this item:
- Deepankar Basu & Duncan K. Foley, 2013. "Dynamics of output and employment in the US economy," Cambridge Journal of Economics, Oxford University Press, vol. 37(5), pages 1077-1106.
- Deepankar Basu & Duncan K. Foley, 2011. "Dynamics of Output and Employment in the U.S. Economy," UMASS Amherst Economics Working Papers 2011-03, University of Massachusetts Amherst, Department of Economics.
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-19 (All new papers)
- NEP-BEC-2011-02-19 (Business Economics)
- NEP-CBA-2011-02-19 (Central Banking)
- NEP-CIS-2011-02-19 (Confederation of Independent States)
- NEP-HME-2011-02-19 (Heterodox Microeconomics)
- NEP-MAC-2011-02-19 (Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Erica L. Groshen & Simon Potter, 2003. "Has structural change contributed to a jobless recovery?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 9(Aug).
- William Milberg & Deborah Winkler, 2010. "Financialisation and the dynamics of offshoring in the USA," Cambridge Journal of Economics, Oxford University Press, vol. 34(2), pages 275-293, March.
- Thomas R. Michl, 1985. "International Comparisons of Productivity Growth: Verdoorn's Law Revisited," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 7(4), pages 474-492, July.
- 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.
- Afþin Þahin & Aysýt Tansel & M. Hakan Berument, 2013.
"Output-Employment Relationship Across Sectors: A Long- Versus Short-Run Perspective,"
2013/9, Turkish Economic Association.
- Afsin Sahin & Aysit Tansel & M. Hakan Berument, 2013. "Output-Employment Relationship across Sectors: A Long- versus Short-Run Perspective," KoÃ§ University-TUSIAD Economic Research Forum Working Papers 1311, Koc University-TUSIAD Economic Research Forum.
- Afsin Sahin & Aysit Tansel & M.Hakan Berument, 2013. "Output-Employment Relationship across Sectors:A Long- versus Short-Run Perspective," ERC Working Papers 1305, ERC - Economic Research Center, Middle East Technical University, revised May 2013.
- Sahin, Afsin & Tansel, Aysit & Berument, Hakan, 2011. "Output-Employment Relationship across Sectors: A Long- versus Short-Run Perspective," MPRA Paper 46875, University Library of Munich, Germany, revised 07 Jun 2012.
- Sahin, Afsin & Tansel, Aysit & Berument, Hakan, 2013. "Output-Employment Relationship across Sectors: A Long- versus Short-Run Perspective," IZA Discussion Papers 7599, Institute for the Study of Labor (IZA).
- Jochen Hartwig, 2014. "Testing Okun’s Law with Swiss Industry Data," KOF Working papers 14-357, KOF Swiss Economic Institute, ETH Zurich.
- Robert A. Blecker, 2013. "Economic Stagnation in the United States: Underlying Causes and Global Consequences," Working Papers 2013-16, American University, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Judy Fogg).
If references are entirely missing, you can add them using this form.