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Okun’s Law Across Time and Frequencies

Author

Listed:
  • Luís Aguiar-Conraria

    (NIPE and Department of Economics, University of Minho)

  • Manuel M. F. Martins

    (Cef.up and Faculty of Economics, University of Porto)

  • Maria Joana Soares

    (NIPE and Department of Mathematics and Applications, University of Minho)

Abstract

We present the first assessment of U.S. Okun’s Law across time and frequencies, with a set of continuous wavelet tools that allows for estimating Okun’s coefficient and the lead/lag of output over unemployment at each moment of time for each cyclical frequency. We find similar results for the gaps and the first differences specifications at business cycles frequencies, but not at medium and long run cycles. Okun’s coefficient has increased (in absolute value) since the mid-1960s, except in 1985-1995, and is not particularly sensitive to recessions. The lead of output varies considerably along time and also at the different frequencies.

Suggested Citation

  • Luís Aguiar-Conraria & Manuel M. F. Martins & Maria Joana Soares, 2019. "Okun’s Law Across Time and Frequencies," NIPE Working Papers 13/2019, NIPE - Universidade do Minho.
    • Handle: RePEc:nip:nipewp:13/2019
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    Cited by:

    1. Bersak, Tim & Sonchak-Ardan, Lyudmyla, 2021. "Marginal changes, marginal impacts: The limits of changes to WIC and their ability to influence breastfeeding rates," Children and Youth Services Review, Elsevier, vol. 126(C).
    2. Bilgili, Faik & Koçak, Emrah & Kuşkaya, Sevda & Bulut, Ümit, 2020. "Estimation of the co-movements between biofuel production and food prices: A wavelet-based analysis," Energy, Elsevier, vol. 213(C).
    3. Naman Mishra & Simon Grima & Ercan Ozen, 2024. "Unpacking the black box: Investigating the role of social protection programmes in promoting decent work and economic growth in low‐income countries," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(5), pages 5825-5835, October.
    4. Mindaugas Butkus & Laura Dargenytė-Kacilevičienė & Kristina Matuzevičiūtė & Dovilė Ruplienė & Janina Šeputienė, 2024. "When and for Whom Does Growth Becomes Jobless?," Economies, MDPI, vol. 12(1), pages 1-21, January.
    5. Das, Ridoy & Wang, Yue & Putrus, Ghanim & Kotter, Richard & Marzband, Mousa & Herteleer, Bert & Warmerdam, Jos, 2020. "Multi-objective techno-economic-environmental optimisation of electric vehicle for energy services," Applied Energy, Elsevier, vol. 257(C).
    6. Fan Hu & Zidong An, 2024. "The Buffering Effect of Higher Education Expansion on the Okun’s Law in China," Hacienda Pública Española / Review of Public Economics, IEF, vol. 250(3), pages 89-107, September.

    More about this item

    Keywords

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    JEL classification:

    • C49 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Other
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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