Defining u as the unemployment rate and $\bar { u }$ as the natural rate of unemployment, Okun's law is given by $\tilde { Y } = 2 \times ( u - \bar { u } )$ .

Name: Defining u as the unemployment rate and $\bar { u }$ as the natural rate of unemployment, Okun's law is given by $\tilde { Y } = 2 \times ( u - \bar { u } )$ .
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Question

Defining u as the unemployment rate and $\bar { u }$  as the natural rate of unemployment, Okun's law is given by $\tilde { Y } = 2 \times ( u - \bar { u } )$  .

Quizplus · Accepted Answer

Okun's law relates the output gap to the difference between actual and natural unemployment rates, but the coefficient is typically around 2 or 3, not exactly 2.

Defining U as the Unemployment Rate And uˉ\bar { u }uˉ

Defining U as the Unemployment Rate And $\bar { u }$