CEPII, Recherche et Expertise sur l'economie mondiale
Post-Recession US Employment through the Lens of a Non-Linear Okun's Law


Menzie Chinn
Laurent Ferrara
Valérie Mignon

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 Résumé :
This paper aims at investigating the relationship between employment and GDP in the United States. We disentangle trend and cyclical employment components by estimating a non-linear Okun’s law based on a smooth transition error-correction model that simultaneously accounts for long-term relationships between growth and employment and short-run instability over the business cycle. Our findings based on out-of-sample conditional forecasts show that, since the exit of the 2008-09 recession, US employment is on average around 1% below the level implied by the long run output-employment relationship, meaning that about 1.2 million of the trend employment loss cannot be attributed to the identified cyclical factors.

 Mots-clés : loi d’Okun | emploi structurel | modélisation non linéaire

 JEL : E24, E32, C22
CEPII Working Paper
N°2013-13, May 2013

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