Unemployment, Macroeconomics

Assignment Help:

what is okun''s law ? In economics study, Okun's law also named after Arthur Melvin Okun is an empirically observed relationship relating among unemployment to losses in a specific country's production. The "gap version" shows that for every 1% increasing in the rate of unemployment, a country's GDP will be at additional roughly 2% lower than their potential GDP. The "difference version" shows the relationship among quarterly changes in unemployment & quarterly changes in real GDP. The stability & usefulness of the law has been disputed. The term refers to economist Arthur Okun who proposed this relationship in 1962.

Imperfect relationship

Okun's law is more precisely known "Okun's rule of thumb" due to it is primarily an empirical inspection rather than a result resulting from theory. Okun's law is estimated because factors other than employment for example as productivity affect output. In Okun's real statement of his law, a 3% increase in resultant output corresponds to a 1% decline in the rate of unemployment; a .5% increase in labor force participation; a .5% increase in hours worked per an employee; and a 1 % increase in output per hours worked called labor productivity.


Related Discussions:- Unemployment

Economic system is the best solution, Which economic system is the best sol...

Which economic system is the best solution to handling a crisis of epic proportion?

Define gross requirements and scheduled receipts, One unit of A is made up ...

One unit of A is made up of one unit of B and one unit of C. B is made of three units of D and one unit if F. C is composed of three units of B, one unit of D, and four units of E.

Money and banking, Suppose the price level in year 2009 is 100 and $100 buy...

Suppose the price level in year 2009 is 100 and $100 buys 100 notebooks that year. If the price level rises to 125 in year 2010, what is the new value or purchasing power of the do

System of private property rights, A system of private property rights A...

A system of private property rights A. enhances economic growth by creating incentives to the Fed to maintain stable prices. B. enhances economic growth by increasing the pro

What is profitability analysis, This is an examination of costs and revenue...

This is an examination of costs and revenue to explain whether a venture will make a profit. This is significant information in deciding on whether to make an investment. The lengt

Describe endogenous growth theory, Q. Describe Endogenous growth theory? ...

Q. Describe Endogenous growth theory? Endogenous growth theory or new growth theory was developed in the 1980s by Paul Romer and others. In neo-classical model, technological p

Cost curves, the difference between the AC and the AVC curve

the difference between the AC and the AVC curve

Economy, Compare Classical economic theory to Keynesian economic theory. Wh...

Compare Classical economic theory to Keynesian economic theory. Which approach, if either is the US currently applying and what have been the effects of such policies?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd