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Does “Okun’s Law” state a Pi:1 ratio? Toward a harmonic interpretation of why Okun’s Law works

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Listed:
  • Albers, Scott
  • Albers, Andrew L.

Abstract

In Albers & Albers (Spring, 2013) we demonstrated that the historic development of U.S. real GNP, 1869-present, may be structured in recurring 14-year periods. A steady-state rate of growth of 3.4969% is thereby calculated, generating an increase in real GNP proportional to the famous “Golden Mean” (1:phi or 1:1.6180) every fourteen years on average. Building on this foundation we show herein that “Okun’s Law,” a 3:1 proportion between percent growth in real GNP and percent decrease in the rate of unemployment, is actually a pi:1 proportion, created through a form of mathematic / harmonic inverse. The resulting model of economics in the United States is thereby aligned with geometric, harmonic and trigonometric analysis, rather than purely statistical methods.

Suggested Citation

  • Albers, Scott & Albers, Andrew L., 2013. "Does “Okun’s Law” state a Pi:1 ratio? Toward a harmonic interpretation of why Okun’s Law works," MPRA Paper 44843, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:44843
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    References listed on IDEAS

    as
    1. Albers, Scott & Albers, Andrew L., 2011. "The Golden Mean, the Arab Spring and a 10-step analysis of American economic history," MPRA Paper 33004, University Library of Munich, Germany.
    2. Michael T. Owyang & Tatevik Sekhposyan, 2012. "Okun’s law over the business cycle: was the great recession all that different?," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 399-418.
    3. Albers, Scott & Albers, Andrew L., 2012. "On the mathematic prediction of economic and social crises: toward a harmonic interpretation of the Kondratiev wave," MPRA Paper 37771, University Library of Munich, Germany.
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    More about this item

    Keywords

    Pi; Phi; Golden Mean; Okun's Law; United States economic history; GNP Spiral; Kondratiev Wave; Long Wave; trigonometric analysis;
    All these keywords.

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General
    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • B0 - Schools of Economic Thought and Methodology - - General
    • B00 - Schools of Economic Thought and Methodology - - General - - - History of Economic Thought, Methodology, and Heterodox Approaches
    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • B59 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Other
    • C0 - Mathematical and Quantitative Methods - - General
    • C00 - Mathematical and Quantitative Methods - - General - - - General
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C19 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Other
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • D0 - Microeconomics - - General
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • E0 - Macroeconomics and Monetary Economics - - General
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E19 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Other
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • P1 - Political Economy and Comparative Economic Systems - - Capitalist Economies
    • P10 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - General
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • Z0 - Other Special Topics - - General
    • Z00 - Other Special Topics - - General - - - General

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