An Empirical Analysis of the Relationship Between GDP and Unemployment
Abstract
Okun's law has been proven to be one of the most accepted theories in the macroeconomics field. It describes the relationship between gross domestic product (GDP) and unemployment. Arthur Okun's (1962) study was developed to help apply appropriate macroeconomic policy changes. Though the coefficient has been re‐estimated, Okun's original work states that a one‐percentage point reduction in the unemployment rate would produce approximately 3% more output. This correlation has continuously been scrutinized, its accuracy studied, and the degree of dependency these variables have on one another has been evaluated.
Citation
Farsio, F. and Quade, S. (2003), "An Empirical Analysis of the Relationship Between GDP and Unemployment", Humanomics, Vol. 19 No. 3, pp. 1-6. https://doi.org/10.1108/eb018884
Publisher
:MCB UP Ltd
Copyright © 2003, MCB UP Limited