Question
Okun's Law is written as u - u(-1) = -0.4(g Y - 3%) a. What is the sign of u - u(-1) in a recession?
Okun's Law is written as u - u(-1) = -0.4(gY - 3%)
a. What is the sign of u - u(-1) in a recession? What is thesign of u - u(-1) in a recovery?
b. Explain where the 3% number comes from?
c. Explain why the coefficient on the term (gY - 3%) is -0.4and not -1.
d. Suppose the number of immigrants per year allowed toenter the United States is sharply increased. How wouldOkun's law change?
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Environmental Economics
Authors: Stephen Smith
6th Edition
0199583587, 9780199583584
