Okun's Law
Okun's Law is an empirical relationship linking changes in the unemployment rate to the growth rate of real GDP, suggesting that higher unemployment corresponds to slower output growth relative to potential.
Example: In an analysis, a 1 percentage point increase in the unemployment rate is often interpreted, under Okun's Law, as corresponding to roughly a 2 percentage point shortfall in real GDP relative to potential, though the exact coefficient can vary over time.
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