Do Forecasters Believe in Okun's Law? an Assessment of Unemployment and Output Forecasts ePub (Adobe DRM) download by Laurence M. Ball

Do Forecasters Believe in Okun's Law? an Assessment of Unemployment and Output Forecasts

INTERNATIONAL MONETARY FUND
Publication date: February 2014
ISBN: 9781475584103
Digital Book format: ePub (Adobe DRM)

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This paper provides an assessment of the consistency of unemployment and output forecasts. We show that, consistent with Okun's Law, forecasts of real GDP growth and the change in unemployment are negatively correlated. The Okun coefficient-the responsiveness of unemployment to growth-from forecasts is fairly similar to that in the data for various countries. Furthermore, revisions to unemployment forecasts are negatively correlated with revisions to real GDP forecasts. These results are based on forecasts taken from Consensus Economics for nine advanced countries since 1989.
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