TY  - JOUR
AU  - Ball,Laurence M.
AU  - Leigh,Daniel
AU  - Loungani,Prakash
TI  - Okun's Law: Fit at Fifty?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18668
PY  - 2013
Y2  - January 2013
UR  - http://www.nber.org/papers/w18668
L1  - http://www.nber.org/papers/w18668.pdf
N1  - Author contact info:
Laurence M. Ball
Department of Economics
Johns Hopkins University
Baltimore, MD 21218
Tel: 410/516-7605
Fax: 410/516-7600
E-Mail: lball@jhu.edu

Daniel Leigh
International Monetary Fund
Research Department
700 19th Street, NW
Rm. 10-700N
Washington, DC 20431
E-Mail: dleigh@imf.org

Prakash Loungani
International Monetary Fund
700 19th Street, NW
Washington, DC 20431
Tel: 202-623-7043
Fax: 202-623-4943
E-Mail: ploungani@imf.org
AB  - 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 is a strong and stable relationship in most countries, one that did not change substantially during 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 labor markets, but it is not related to differences in employment protection legislation.
ER  -