Okun's Law : Fit at 50? / Laurence Ball, Daniel Leigh, Prakash Loungani.

Format:

Book

Government document

Author/Creator:

Ball, Laurence.

Contributor:

Leigh, Daniel.

Loungani, Prakash.

Series:

IMF Working Papers; Working Paper ; No. 2013/010

IMF Working Papers

Language:

English

Subjects (All):

Unemployment--United States--History--20th century--Econometric models.

Unemployment.

Unemployment--History--20th century--Econometric models.

Macroeconomics--Econometric models.

Macroeconomics.

Recessions--Econometric models.

Recessions.

Physical Description:

1 online resource (41 p.)

Place of Publication:

Washington, D.C. : International Monetary Fund, 2013.

Language Note:

English

Summary:

This paper asks how well Okun’s Law fits short-run unemployment movements in the United States since 1948 and in twenty advanced economies since 1980. We find that Okun’s Law isa strong and stable relationship in most countries, one that did not change substantiallyduring the Great Recession. Accounts of breakdowns in the Law, such as the emergence of“jobless recoveries,” are flawed. We also find that the coefficient in the relationship—the effect of a one percent change in output on the unemployment rate—varies substantially across countries. This variation is partly explained by idiosyncratic features of national labormarkets, but it is not related to differences in employment protection legislation.

Contents:

Cover; Okun's Law: Fit at 50?; Abstract; INTRODUCTION; II. ESTIMATING OKUN'S LAW; A. Okun's Law; B. Estimation; III. OKUN'S LAW IN THE UNITED STATES; A. Annual Data: Main Results; B. Annual Data: Robustness; Addressing the Endpoint Problem; Forecast Errors; CBO Estimates; C. Quarterly Data; D. Comparison to Okun (1962); E. Output, Employment, and Unemployment; IV. JOBLESS RECOVERIES?; V. OKUN'S LAW IN 20 ADVANCED ECONOMIES; A. Basic Results; B. Stability Over Time; VI. OKUN'S LAW IN THE GREAT RECESSION; A. Output and Unemployment from Peak to Trough; B. Correcting for the Length of Recessions

C. Adjusting for Country-Specific CoefficientsD. A German Miracle?; VII. EXPLAINING CROSS-COUNTRY VARIATION IN OKUN'S LAW; A. Looking for Explanatory Variables; B. Individual Countries; Spain; Japan; Switzerland; Austria; VIII. CONCLUSION; REFERENCES; Tables; 1. United States: Estimates of Okun's Law; Table 2. United States: Estimates of Okun's Law; Table 3. United States: Replication and Update of Okun's (1962) Regression; Table 4. United States: Estimates of Okun's Law and Unemployment-Employment Relation; Table 5. 20 Advanced Economies: Estimates of Okun's Law

Table 6. 20 Advanced Economies: Estimates of Okun's LawFigures; Figure 1. United States: Okun's Law, 1948-2011; Figure 2. United States: Test for Okun Coefficient Instability at Unknown Date, 1948-2011; Figure 3. Robustness: U.S. Natural Rates; Figure 4. United States: Okun's Law Based on Forecast Errors; Figure 5. United States: Actual and Fitted Unemployment Rate; Figure 6. United States: Okun's Law for Employment, and Unemployment-Employment Relation, 1948-2011; Figure 7. United States and the Great Recession; Figure 8. United States and the 1981 Recession

Figure 9. The Great Recession: Peak-to-Trough Output and Unemployment ChangesFigure 10. Explaining Cross-Country Variation in Okun Coefficients

Notes:

Description based upon print version of record.

Includes bibliographical references.

Description based on print version record.

ISBN:

9781589068926

1589068920

9781475585742

1475585748

9781299264489

1299264484

9781475537352

1475537352