Post-recession US employment through the lens of a non-linear Okun’s law - Archive ouverte HAL
Pré-Publication, Document De Travail Année : 2013

Post-recession US employment through the lens of a non-linear Okun’s law

Menzie Chinn
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Laurent Ferrara
Valérie Mignon
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Résumé

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.
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Dates et versions

hal-04141207 , version 1 (26-06-2023)

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  • HAL Id : hal-04141207 , version 1

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Menzie Chinn, Laurent Ferrara, Valérie Mignon. Post-recession US employment through the lens of a non-linear Okun’s law. 2013. ⟨hal-04141207⟩
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