Law of Okun

In economy, the law of Okun describes a linear relation between the rate of growth (of GDP) and the variation of the rate of Chômage. In lower part of a certain threshold of growth, unemployment increases; with the top of this threshold, it decreases, with a constant elasticity. The law of Okun represents the hope to see the growth causing a fall of unemployment for the economists

She was proposed by Arthur Okun in 1962. For the the United States, the law takes the form: $\backslash \; Delta\; U\; =\; -0,5\; \backslash \; times\; (\backslash \; Delta\; Y/Y\; (\%)\; -\; 3)\; \backslash ,$. For each point of growth above 3%, unemployment rate decreases by 0,5 point.

The law describes an overall relation, but the parameters, whose critical threshold of growth, vary according to the country and the time. That can encourage with policies of “enrichment of the growth in employment”, which aims at decreasing this threshold.

Critical

From an external point of view, any claim to present a law in economy criticizable and is criticized because of difficulty for this discipline of exceeding the normative aspect, highlighted for example by Claude Mouchot.

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