Do forecasters believe in Okun’s Law? An assessment of unemployment and output forecasts

Laurence Ball, Joao Jalles and Prakash Loungani

International Journal of Forecasting, 2015, vol. 31, issue 1, 176-184

Abstract: This paper provides an assessment of the consistency of unemployment and output forecasts. We show that, consistent with Okun’s Law, forecasts of real GDP growth and the change in unemployment are negatively correlated. The Okun coefficient—the responsiveness of unemployment to growth—from forecasts is fairly similar to that in the actual data for various countries. Furthermore, revisions to unemployment forecasts are negatively correlated with revisions to real GDP forecasts. These results are based on forecasts taken from Consensus Economics for nine advanced countries since 1989.

Keywords: Labor market; Forecast revisions; Great Recession; Forecast assessment (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0169207014000466
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Do Forecasters Believe in Okun’s Law? An Assessment of Unemployment and Output Forecasts (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:intfor:v:31:y:2015:i:1:p:176-184

DOI: 10.1016/j.ijforecast.2014.03.009

Access Statistics for this article

International Journal of Forecasting is currently edited by R. J. Hyndman

More articles in International Journal of Forecasting from Elsevier
Bibliographic data for series maintained by Catherine Liu ().