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Do Forecasters Believe in Okun’s Law? An Assessment of Unemployment and Output Forecasts

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...

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Bibliographic Details
Main Author: Ball, Laurence
Other Authors: Jalles, João Tovar, Loungani, Prakash
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2014
Series:IMF Working Papers
Subjects:
Economic & Financial Crises & Disasters
Labour; Income Economics
Financial Crises
Economic Forecasting
Unemployment: Models, Duration, Incidence, And Job Search
Fiscal Policy
Unemployment
National Accounts
National Income
Prices, Business Fluctuations, And Cycles: Forecasting And Simulation
Labor
Global Financial Crisis, 2008-2009
Gdp Forecasting
Global Financial Crisis Of 2008-2009
Forecasting And Other Model Applications
Macroeconomics
Unemployment Rate
Forecasting And Simulation: Models And Applications
Germany
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary: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
Physical Description:19 pages
ISBN:9781475584097

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