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Okun's Law, Asymmetries and Jobless Recoveries in the United States: A Markov-Switching Approach

Mark J. Holmes () and Brian Silverstone ()

Working Papers in Economics from University of Waikato, Department of Economics

Abstract: This paper offers a new perspective on Markov regime-switching approaches to asymmetries in Okun’s law by modeling the existing approaches as special cases. Prevailing models assume either asymmetry between unemployment and output across regimes or asymmetry within a single regime. Our specification combines both approaches. Our empirical results give an insight into the apparent ‘jobless recovery’ experiences that began in the United States in 1991 and 2001.

Keywords: Okun’s law; Markov-switching; asymmetry; jobless recoveries; United States (search for similar items in EconPapers)
JEL-codes: C22 E32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac
Date: 2005-12-08
Note: Now published: 'Economics Letters' 92(2) August 2006, pp.293-99.
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