Show simple item record

dc.contributor.authorForoni, Claudia
dc.contributor.authorFurlanetto, Francesco
dc.description.abstractDespite its stability over time, as for any statistical relationship, Okun’s law is subject to deviations that can be large at times. In this paper, we provide a mapping between residuals in Okun’s regressions and structural shocks identified using a SVAR model by inspecting how unemployment responds to the state of the economy. We show that deviations from Okun’s law are a natural and expected outcome once one takes a multi-shock perspective, as long as shocks to automation, labor supply and structural factors in the labor market are taken into account. Our simple recipe for policy makers is that, if a positive deviation from Okun’s law arises, it is likely to be generated by either positive labor supply or automation shocks or by negative structural factors shocks.en_US
dc.publisherNorges Banken_US
dc.relation.ispartofseriesWorking paper;4/2022
dc.rightsAttribution-NonCommercial-NoDerivatives 4.0 Internasjonal*
dc.subjectJEL: E24en_US
dc.subjectJEL: E32en_US
dc.subjectJEL: C32en_US
dc.subjectOkun’s lawen_US
dc.subjectlabor marketsen_US
dc.subjectbusiness cycle fluctuationsen_US
dc.subjectbayesian VARen_US
dc.titleExplaining Deviations from Okun’s Lawen_US
dc.typeWorking paperen_US
dc.subject.nsiVDP::Samfunnsvitenskap: 200::Økonomi: 210::Samfunnsøkonomi: 212en_US

Files in this item


This item appears in the following Collection(s)

Show simple item record

Attribution-NonCommercial-NoDerivatives 4.0 Internasjonal
Except where otherwise noted, this item's license is described as Attribution-NonCommercial-NoDerivatives 4.0 Internasjonal