Journal of Applied Econometrics

Cyclical output, cyclical unemployment, and Okun's coefficient: A new approach

Journal Article


Estimates of Okun's coefficient are obtained using new estimates of cyclical GNP and cyclical unemployment rates for the post‐war USA. Empirical estimates of the coefficient are near —0.25, somewhat smaller in magnitude than other recent estimates obtained applying similar econometric techniques to different estimates of cyclical output and unemployment. Tests fail to reject the hypothesis of parameter stability across an hypothesized break between the third and fourth quarters of 1973, suggesting similar relationships between cyclical output and unemployment both before and after the supply shocks of the 1970s.

Related Topics

Related Publications

Related Content

Site Footer


This website is provided by John Wiley & Sons Limited, The Atrium, Southern Gate, Chichester, West Sussex PO19 8SQ (Company No: 00641132, VAT No: 376766987)

Published features on are checked for statistical accuracy by a panel from the European Network for Business and Industrial Statistics (ENBIS)   to whom Wiley and express their gratitude. This panel are: Ron Kenett, David Steinberg, Shirley Coleman, Irena Ograjenšek, Fabrizio Ruggeri, Rainer Göb, Philippe Castagliola, Xavier Tort-Martorell, Bart De Ketelaere, Antonio Pievatolo, Martina Vandebroek, Lance Mitchell, Gilbert Saporta, Helmut Waldl and Stelios Psarakis.