Puzzles, Paradoxes and Regularities: Cyclical and Structural Productivity in the US (1950-2005)

Yongbok Jeon and Matías Vernengo

Working Paper Series, Department of Economics, University of Utah from University of Utah, Department of Economics

Abstract: Changes in labor productivity have been a source of puzzlement and paradoxical results for economists. We suggest that puzzles and paradoxes vanish once two simple regularities are properly acknowledged. Okun and Verdoorns Laws explain 87 percent of all the variations in labor productivity. Also, our estimation method and our results suggest that conventional measures of Okuns Law have overestimated the value of the Okun coefficient, and accepted a greater degree of variability than is actually guaranteed by the empirical evidence. Okuns Law has been relatively stable through time, and there is no significant decrease in the value of the parameter since the 1960s.

Keywords: Productivity; Cycle; Structural Change (search for similar items in EconPapers)
JEL-codes: E32 O49 O51 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2007
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:uta:papers:2007_07

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