Okun’s Law in Finland: Declining Labor Market Sensitivity

A new IMF report on Finland’s labor market finds that “the response of employment to output seems to have slowed since 2000. Based on the entire 1973–2016 sample, the estimate of [Okun coefficient] is equal to 0.5. However, there are substantial differences between the subsamples considered. For example, using data until 2000 yields a [Okun coefficient] of 0.75, while more recently a one percent increase in output has been associated only with a 0.3 percent expansion of employment.”

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Continue reading here, page 23-30.

Posted by at 10:16 AM

Labels: Unemployment

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