Puzzles, Paradoxes and Regularities: Cyclical and Structural Productivity in the US (1950-2005)
AbstractChanges in labor productivity have been a source of puzzlement and paradoxical results for economists. We suggest that puzzles and paradoxes vanish once two simple regularities are properly acknowledged. Okun and Verdoorn’s Laws explain 87 percent of all the variations in labor productivity. Also, our estimation method and our results suggest that conventional measures of Okun’s Law have overestimated the value of the Okun coefficient, and accepted a greater degree of variability than is actually guaranteed by the empirical evidence. Okun’s Law has been relatively stable through time, and there is no significant decrease in the value of the parameter since the 1960s.
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Bibliographic InfoPaper provided by University of Utah, Department of Economics in its series Working Paper Series, Department of Economics, University of Utah with number 2007_07.
Length: 12 pages
Date of creation: 2007
Date of revision:
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Productivity; Cycle; Structural Change;
Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- O49 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other
- O51 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
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- Ho-Chuan Huang & Shu-Chin Lin, 2006. "A flexible nonlinear inference to Okun's relationship," Applied Economics Letters, Taylor & Francis Journals, vol. 13(5), pages 325-331.
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