Robert M. La Follette School of Public Affairs

Post-Recession U.S. Employment through the Lens of a Non-Linear Okun’s Law

The authors investigate how well trend gross domestic product can explain trend U.S. employment, allowing for nonlinear effects in the short-run dynamics. They find that near the end of 2012, private employment is about 1 percent lower than predicted on the basis of a model estimated during the 1960-2007 period. Models without nonlinear effects over-predict employment by measurably larger margins.

Additional Info

  • Volume or issue no.: La Follette School Working Paper No. 2013-006
  • Author(s): Menzie D. Chinn, Laurent Ferrara and Valérie Mignon