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Title:Puzzles, paradoxes and regularities: Cyclical and structural productivity in the US (1950 - 2005) PDF Logo
Authors:Jeon, Yongbok
Vernengo, Matías
Issue Date:2007
Series/Report no.:Working Paper, University of Utah, Department of Economics 2007-07
Abstract:Changes in labor productivity have been a source of puzzlement and paradoxical results for economists. We suggest that puzzles and paradoxes vanish once two simple regularities are properly acknowledged. Okun and Verdoorn's Laws explain 87 percent of all the variations in labor productivity. Also, our estimation method and our results suggest that conventional measures of Okun's Law have overestimated the value of the Okun coefficient, and accepted a greater degree of variability than is actually guaranteed by the empirical evidence. Okun's Law has been relatively stable through time, and there is no significant decrease in the value of the parameter since the 1960s.
Subjects:Productivity
Cycle
Structural Change
JEL:E32
O49
O51
Document Type:Working Paper
Appears in Collections:Department of Economics Working Paper Series, University of Utah

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