Output Trends and Okun's Law

39 Pages Posted: 13 Dec 2005

See all articles by Gert Schnabel

Gert Schnabel

Bank for International Settlements (BIS)

Date Written: April 2002

Abstract

This paper estimates trend growth rates for a sample of industrial countries by applying Okun's law in first differences. Despite the simplicity of the approach and the restrictive assumptions, the method typically yields reasonable results when trend shifts in the Okun coefficients and changes in structural unemployment are allowed for. Particular caution is required in using the method for estimating output gaps.

Suggested Citation

Schnabel, Gert, Output Trends and Okun's Law (April 2002). BIS Working Paper No. 111, Available at SSRN: https://ssrn.com/abstract=846324 or http://dx.doi.org/10.2139/ssrn.846324

Gert Schnabel (Contact Author)

Bank for International Settlements (BIS) ( email )

CH-4002 Basel, Basel-Stadt
Switzerland