Okun's Law

What Does Okun's Law Mean?
A relationship between an economy's GDP gap and the actual unemployment rate.

Investopedia explains Okun's Law
The relationship is represented by a ratio of 1 to 2.5. Thus, for every 1% excess of the natural unemployment rate, a 2.5% GDP gap is predicted.

Filed Under: Economics, Financial Theory

Related Terms

Economics
Frictional Unemployment
Full Employment
GDP Gap
Gross Domestic Product - GDP
Inflation
Natural Unemployment
Okun Gap
Phillips Curve
Structural Unemployment
More Related Terms

Related Links

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