Okun's Law revisited

Abstract

The relationship between changes in output and the unemployment rate is of significant interest around times of recession and economic recovery. This article looks at various aspects of this relationship over time, across various constituents of the labour market and across different countries. The article also explores the interactions between changes in the unemployment rate with the household population, economic activity rate, average hours and labour productivity in accounting for recent output movements in the UK economy and how these compare to previous recessions and recoveries.