Thursday, November 20, 2014
On July 9, 2011 when U.S. unemployment was at record highs, Paul Krugman wrote: “Why is unemployment remaining high? Because growth is weak — period, full stop, end of story.” Krugman went on to appeal to an old relationship known as Okun’s Law: “Historically, low or negative growth has meant rising unemployment, fast growth falling unemployment (Okun’s Law).”
In a recent presentation at Oberlin College, I also looked at how well Okun’s Law holds across the world. If you don’t want to flip through the (fascinating) 100-slide presentation, I did a short summary this week for the IMF’s blog.
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