Derivation of The Growth Rate Form of Okun's Law
We start with the first form of Okun's law:
Taking annual differences on both sides, we obtain
Putting both numerators over a common denominator, we obtain
Multiplying the left hand side by, which is approximately equal to 1, we obtain
We assume that, the change in the natural rate of unemployment, is approximately equal to 0. We also assume that, the growth rate of full-employment output, is approximately equal to its average value, . So we finally obtain
Read more about this topic: Okun's Law
Famous quotes containing the words growth, rate, form and/or law:
“The wind of change is blowing through the continent. Whether we like it or not, this growth of national consciousness is a political fact.”
—Harold MacMillan (1894–1986)
“We honor motherhood with glowing sentimentality, but we don’t rate it high on the scale of creative occupations.”
—Leontine Young (20th century)
“I have discovered the most exciting, the most arduous literary form of all, the most difficult to master, the most pregnant in curious possibilities. I mean the advertisement.... It is far easier to write ten passably effective Sonnets, good enough to take in the not too inquiring critic, than one effective advertisement that will take in a few thousand of the uncritical buying public.”
—Aldous Huxley (1894–1963)
“With proper attribution, to quote another’s thoughts and words is appropriate; plagiarism, however, is cheating, and it may break copyright law as well.”
—Kenneth G. Wilson (1923)