Abstract
Okun’s law describes the empirical relationship between changes in unemployment and output at the macroeconomic level and has been regarded since its discovery by Arthur Okun (Potential GNP: its measurement and significance. In: Proceedings of the business and economics statistics. American Statistical Association, Washington, DC, p 98–104, 1962) as a building block of traditional macroeconomic models. This article discusses the interpretation of this relationship and summarizes recent developments in the econometric specification of Okun’s law.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsBibliography
Attfield, C.L.F., and B. Silverstone. 1997. Okun’s coefficient: A comment. Review of Economics and Statistics 79: 326–329.
Blanchard, O.J., and D. Quah. 1989. The dynamic effects of aggregate demand and supply disturbances. American Economic Review 79: 655–673.
Crespo Cuaresma, J. 2003. Okun’s law revisited. Oxford Bulletin of Economics and Statistics 65: 439–451.
Evans, G.W. 1989. Output and unemployment dynamics in the United States: 1950–1985. Journal of Applied Econometrics 4: 213–217.
Friedman, B.M., and M.L. Wachter. 1974. Unemployment: Okun’s law, labor force, and productivity. Review of Economics and Statistics 56: 167–176.
Gordon, R.J. 1984. Unemployment and potential output in the 1980s. Brookings Papers on Economic Activity 15: 537–564.
Kaufman, R.T. 1988. An international comparison of Okun’s law. Journal of Comparative Economics 12: 182–203.
Lee, J. 2000. The robustness of Okun’s law: Evidence from OECD countries. Journal of Macroeconomics 22: 331–356.
Moosa, I.A. 1997. A cross-country comparison of Okun’s coefficient. Journal of Comparative Economics 24: 335–356.
Okun, A.M. 1962. Potential GNP: Its measurement and significance. In Proceedings of the business and economics statistics, 98–104. Washington, DC: American Statistical Association.
Prachowny, M.F.J. 1993. Okun’s law: Theoretical foundations and revised estimates. Review of Economics and Statistics 75: 331–336.
Sheehan, R.G., and F. Zahn. 1980. The variability of the Okun coefficient. Southern Economic Journal 47: 488–497.
Weber, C.E. 1995. Cyclical output, cyclical unemployment and Okun’s coefficient: A new approach. Journal of Applied Econometrics 10: 433–445.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Cuaresma, J.C. (2018). Okun’s Law. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2346
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_2346
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences