Okun ’ s Macroscope and the Changing Cyclicality of Underlying Margins of Adjustment

  title={Okun ’ s Macroscope and the Changing Cyclicality of Underlying Margins of Adjustment},
  author={M. Catherine Daly and JOHN G. FERNALD and {\`O}scar Jord{\`a} and FERNANDA NECHIO},
A growth-accounting decomposition of “Okun’s Law” sheds light on the empirical magnitude of key margins of adjustment used by firms and households. Using this decomposition, we investigate the evolution of the business-cycle comovement between different components of the production function and unemployment. Changes in the cyclical behavior of labor productivity stand out. Our results provide insight into desirable features of macro models that seek to match central facts about both labor… CONTINUE READING


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