This paper aims to analyse the relationship between unemployment rate and economic growth in the United States of America (US) which can be explained by the Okun’s law. It uses time series data on Gross Domestic Product (GDP) and unemployment to test the significance of Okun’s law in forecasting economic fluctuations in the country. With the aid of data analysis and several regressions, this paper finds resounding evidence to conclude that despite the widespread popularity, acceptance and applicability of the Okun’s law, it is not the most effective forecasting tool for economic growth in the US.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Literature Review
- Data and Summary Statistics
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper aims to analyze the relationship between unemployment rate and economic growth in the United States (US) by exploring the application of Okun's law. Using time series data on Gross Domestic Product (GDP) and unemployment, the paper investigates the law's effectiveness in forecasting economic fluctuations within the country.
- Okun's law and its significance in forecasting economic growth
- Relationship between unemployment rate and GDP growth in the US
- Different versions of Okun's law and their limitations
- Impact of economic events on GDP growth and unemployment rate
- Analysis of time series data on GDP and unemployment rate
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: This chapter outlines the research question and objectives of the paper, focusing on the analysis of the relationship between unemployment rate and economic growth in the US through the lens of Okun's law. The paper aims to investigate the effectiveness of Okun's law in forecasting economic fluctuations within the US.
- Literature Review: This chapter explores the theoretical underpinnings of Okun's law, discussing its different versions and their implications for understanding the relationship between GDP growth and unemployment rate. The chapter also examines the limitations of Okun's law and its potential deviations from empirical observations, highlighting the importance of considering these factors in forecasting.
- Data and Summary Statistics: This chapter presents the time series data used in the research, providing a detailed description of the variables and their trends over time. The chapter includes visual representations of the data, such as graphs, and discusses the historical context of the data, including significant economic events and their impact on GDP growth and unemployment rate.
Schlüsselwörter (Keywords)
The main keywords and focus topics of the text are: Okun's law, economic growth, unemployment rate, time series data, GDP growth, forecasting, economic fluctuations, US economy, regression analysis, data analysis, historical context.
- Quote paper
- Anonym (Author), 2022, Time series assignment. The significance of Okun’s law in forecasting economic growth, Munich, GRIN Verlag, https://www.grin.com/document/1452753
