Unemployment and GDP

Paper Summary:

The paper explains the examination can best be pursued by analyzing the connection between unemployment and GDP growth. The paper quotes Altig et al (1997) who says this is often formally summarized by the statistical relationship known as Okun's law. The paper discusses this law as developed by economist Arthur Okun in 1962, how it related decreases in the unemployment rate to increases in output growth.

From the Paper:

"Examining unemployment and GDP in terms of the banking industry can best be pursued by analyzing the connection between unemployment and GDP growth. As Altig et al (1997) notes, this is often formally summarized by the statistical relationship known as `Okun's law.' As developed by economist Arthur Okun in 1962, this law related "decreases in the unemployment rate to increases in output growth." Unemployment of course is defined as people who are both out of work and seeking employment. The percentage of people in the entire labor force who are in this category is the unemployment rate. GDP is of course Gross Domestic Product, and is defined as the total value of all goods and services produced by an economy. It is a function of productivity and hours worked."

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