Post-recession US Employment through the Lens of a Non-linear Okun's law
Menzie Chinn (),
Laurent Ferrara () and
Valérie Mignon ()
No 19047, NBER Working Papers from National Bureau of Economic Research, Inc
This paper aims at investigating the relationship between employment and GDP in the United States. We disentangle trend and cyclical employment components by estimating a non-linear Okun's law based on a smooth transition error-correction model that simultaneously accounts for long-term relationships between growth and employment and short-run instability over the business cycle. Our findings based on out-of-sample conditional forecasts show that, since the exit of the 2008-09 recession, US employment is on average around 1% below the level implied by the long run output-employment relationship, meaning that about 1.2 million of the trend employment loss cannot be attributed to the identified cyclical factors.
JEL-codes: C22 E24 E32 (search for similar items in EconPapers)
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Published as Journal of Macroeconomics Volume 42, December 2014, Pages 118–129 Cover image Explaining US employment growth after the great recession: The role of output–employment non-linearities Menzie Chinna, , , Laurent Ferrarab, , Valérie Mignonc,
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Working Paper: Post-Recession US Employment through the Lens of a Non-Linear Okun's Law (2013)
Working Paper: Post-recession US employment through the lens of a non-linear Okun’s law (2013)
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