Dissecting Okun’s law beyond time and frequency

Jens J. Krüger and Michael Neugart

Applied Economics Letters, 2021, vol. 28, issue 20, 1744-1749

Abstract: The stability of Okun’s law mostly has been investigated over time. In this paper, we apply wavelet analysis to dissect the relationship between GDP growth and changes in the unemployment rate by time and frequency. Furthermore, we analyse whether changes in Okun’s law are related to changes in the underlying production function or are related to changes in the relationship between unemployment and employment. The results show that coherence of GDP growth and changes in the unemployment rates at lower frequencies vanished with the Great Moderation. Coherence at higher frequencies shows an on-off pattern with a re-emergence of Okun’s law during the Great Recession. These changes appear to be mainly driven by changes in the underlying production function.

Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/13504851.2020.1853664 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Dissecting Okun’s law beyond time and frequency (2021)
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:taf:apeclt:v:28:y:2021:i:20:p:1744-1749

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEL20

DOI: 10.1080/13504851.2020.1853664

Access Statistics for this article

Applied Economics Letters is currently edited by Anita Phillips

More articles in Applied Economics Letters from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().