Do Forecasters Believe in Okun’s Law? : An Assessment of Unemployment and Output Forecasts

Ball, Laurence M

This paper provides an assessment of the consistency of unemployment and output forecasts. We show that, consistent with Okun’s Law, forecasts of real GDP growth and the change in unemployment are negatively correlated. The Okun coefficient—the responsiveness of unemployment to growth—from forecasts is fairly similar to that in the data for various countries. Furthermore, revisions to unemployment forecasts are negatively correlated with revisions to real GDP forecasts. These results are based on forecasts taken from Consensus Economics for nine advanced countries since 1989

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Year of publication:	2014
Authors:	Ball, Laurence M.
Other Persons:	Jalles, João Tovar (contributor) ; Ball, Laurence M. (contributor) ; Loungani, Prakash (contributor)
Publisher:	Washington, D.C : International Monetary Fund
Subject:	Arbeitslosigkeit \| Unemployment \| Prognoseverfahren \| Forecasting model \| Okunsches Gesetz \| Okun's law \| Bruttoinlandsprodukt \| Gross domestic product \| Prognose \| Forecast \| Wirtschaftsprognose \| Economic forecast \| Frühindikator \| Leading indicator \| Theorie \| Theory