How Unemployment Affects a Country's Gross Domestic Product and ChinaRepresentation of Okun's Law, using US dataChinaEvaluation of primary dataConclusionThis research This article will examine the relationship between gross domestic product (GDP) and unemployment rates across the world, arguing that both Economic factors are in fact correlated but not necessarily in a causal relationship. The article first reviews the existing literature on the subject, as well as the quantitative evidence available over the last century. In addition to this study, the paper compares Germany, the United States and Canada, and examines recent changes in China. Overall, the paper provides a comprehensive view of the issue through the application of secondary sources and a brief analysis of World Bank data. Through this assessment, the article concludes that this relationship (and Okun's Law) exists in modern economics. Say no to plagiarism. Get a tailor-made essay on “Why violent video games should not be banned”?Get the original essayInverse relationshipsThe effect of unemployment rates on GDP (and vice versa)“Big ideas, big ambitious projects must be embedded in culture at a deeper level than political winds. It has to be deeper than economic fluctuations that might turn people away from an expensive project because they are unemployed and can't feed their families. economic well-being involves many statistical factors. However, there are two factors in particular that all economists agree are important in economic analysis: production and unemployment. First, economists have long been interested in the potential influences and impact of economic output, that is, the amount of output and growth a country produces in a given year. Since the creation of the modern international economy, this has been known as a country's gross domestic product (GDP). The GDP of a country is not only an indicator of the quantity of production of a country in a given year, but can also indicate the overall economic growth of the country compared to the GDP of previous years in the same country. It is one of the most crucial indicators of almost everything about the economy – from potential growth to sustainable economic practices. Second, unemployment rates play an important role in determining the economic well-being of any country, as they are directly linked to an economy's ability to produce and ultimately prove productive in the long run. Unemployment rates became particularly important indicators of recovery in the years following the economic recession of 2008 and 2009. In recent years, economists and policymakers have viewed the unemployment rate as a kind of barometer of economic recovery. In this way, GDP and unemployment rates are crucial to understanding economic stability and growth and are therefore intrinsically linked. This research paper will examine the relationship between gross domestic product (GDP) and unemployment rates across the world, primarily using the recent recession of 2008 as a backdrop. Although the evidence for this relationship is well established, notably through the creation of Okun's Law, this article takes an updated view of the subject, arguing that the two economic factors are in fact correlated but not necessarily in acausal relationship. In brief, the research paper first reviews existing literature on the topic, including an overview of Okun's Law and secondary applications of the concept, as well as available quantitative evidence from the last century. In addition to this review, the article discusses several specific cases highlighting the relationship between growth and unemployment; More specifically, the article compares Germany, the United States and Canada to examine Okun's law more closely, and considers recent changes in China as a possible exception to the coefficient. Overall, the article provides a comprehensive view of Okun's Law, through the application of secondary sources. and a brief analysis of World Bank data. Through this assessment, the article concludes that the relationship between GDP and unemployment rates (and Okun's Law) exists in the modern economy. This is not an exhaustive account of these major economic factors, but rather an adaptation of existing law and research into a unique qualitative and slightly quantitative overview of the modern implications of the relationship between them – particularly in the extent to which both economic factors are linked to the recovery from the 2008 recession.Literature reviewEconomic well-beingOne of the main functions of economics is to determine the economic well-being and prospects of individual economies and of the global economy as a whole. Drivers of this well-being and potential include economic inputs and output, unemployment rates, industrial growth, supply and demand, capital flows, financial crises, etc. In recent years, and especially since the 2008 financial crisis, economists and policymakers have turned to two specific factors as main indicators of economic well-being and recovery from recession: the change in gross domestic product (GDP) and the unemployment rate. . More specifically, potential GDP growth is described as “the rate of real GDP growth that could be sustained with a full employment economy and stable inflation” (Higgins, 2011, p. 2). Therefore, expected GDP is one of the most important factors of economic stability – and, as this article demonstrates, it is intrinsically linked to the unemployment rate in developed economies. This has been particularly true in Western developed countries which have been hardest hit by the crisis. the economic recession (Furceri & Mourougane, 2012). In fact, one study found that financial crises like the recession triggered in 2008 can "reduce potential output by about 1.5 to 2.4 percent on average, with most of the impact coming from the effect on capital” (Furceri, Mourougane, 2012, 822). . It is also interesting to note that these authors found that the overall impact of a financial crisis like that of 2008 varies "depending on the structural characteristics of economies, such as the degree of openness, macroeconomic imbalances, financial deepening and the quality of the economy. of governance” (Furceri & Mourougane, 2012, p. 822). This is a point that will be assessed later in this article, but for now it is enough to recognize that the recovery of Western economies depends largely on GDP and unemployment rates – and on the empirical (even causal) relationship between both. It is also important to note at this point the importance of considering longitudinal data in determining economic well-being. As Baumol (1986) said almost thirty years ago: “Anxiety can attract attention, but it does not necessarily aid clear thinking” (p. 1072). The economist goes on to say that concerns about economic growth atlong term do not necessarily “recognize that an adequate economic analysis of these questions requires a careful study of economic history” (Baumol, 1986, p. 1072). In other words, determining economic recovery and well-being is largely a process of historical economic analysis. The author concludes that it is important to consider the "long term" "because it is unreasonable for economists and policy makers to attempt to discern long-term trends and their outcomes from the flow of short-term developments, which may be dominated by transient conditions. (Baumol, 1986, p. 1084). In this way, this research paper attempts to draw on historical data as well as economic changes since 2008. Policymakers and academics would do well to consider overall historical trends when assessing the relationship between GDP and rates. unemployment. Okun's Law Nearly fifty years old, Okun's law (or coefficient) has proven to be one of the most precise and durable empirical relationships in macroeconomics. Most of the economic literature that assesses the relationship between GDP and unemployment rates today, particularly as signals of recession or economic recovery, relies on this established empirical relationship. As Higgins (2011) puts it, Okun's Law essentially describes the relationship as follows: "If GDP grows quickly, the unemployment rate decreases, if growth is very low or negative, the unemployment rate increases, and if growth is equal to potential, the unemployment rate remains unchanged” (p.2). In other words, there is an inverse empirical relationship between the unemployment rate and GDP in a given country; as GDP increases, unemployment rates decrease, and vice versa. This theory was developed by Okun in 1962, based on data dating from 1947 to 1960 (Okun 1962). Specifically, the coefficient created by Okun predicted that “each percentage point of the unemployment rate above four percent was associated with a decline in real GNP of approximately three percent” (Fidrmuc and Huang, 2015, p. 2). . More than fifty years after this empirical contribution, the Okun coefficient (now known as "Okun's law") is still accepted as a fundamental empirical relationship in macroeconomics. Owyang, Vermann, and Sekhposyan (2013) provide a detailed overview of Okun's Law and present a graph to highlight the empirical relationship. The graph is reproduced here.The relationship according to OkunOwyang's law, Vermann and Sekhposyan, 2013, p. 2. The authors explain that Okun attempted to identify the relationship between two variables: "the difference between the actual level of production and its potential" and "the difference between unemployment and its natural rate" (Owyang, Vermann and Sekposyan , 2013, p.2). By way of explanation, the authors argue, “potential output is not the maximum that an economy could theoretically produce, but a lower and sustainable figure” (Owyang, Vermann and Sekposyan, 2013, p. 2). In this way, Okun's Law is more of a description of the relationship between factors that affect economic growth, rather than a static and unchanging relationship. In this discussion, it is worth mentioning how the Okun coefficient has withstood economic tests over the past half century. For the most part, the empirical relationship has stood the test of time, and most economists agree that this relationship has held true over the past fifty years of economic change (Fidrmuc and Huang, 2015; Hoffman and Lemieux , 2014; Burgen, Meyer and Tasci, 2012). However, this is an important caveat in the continued acceptance of Okun's Law: there is a relationship, but not necessarilycausal. As Burgen, Meyer, and Tasci (2012) conclude, it is crucial to recognize “that Okun's Law is only an empirical relationship. This does not necessarily reflect a structural link between output growth and the unemployment rate. Additionally, the relationship could change over time as labor market dynamics evolve” (np). Similarly, Fidrmuc and Huang (2015) point out that the law is “an empirically rather than theoretically observed relationship” and that it “stipulates a correlation and says little about whether the direction of causality is from growth to unemployment or vice versa.” » (p.5). Therefore, the subsequent discussion of the case studies and empirical evidence does not attempt to establish a causal relationship, but simply an overview of the modern adaptation to Okun's Law. GDP, Unemployment Rates, and Economic Growth According to the average political pundit or economic commentator, the economic implication of the Okun Act following the 2008 financial crisis is quite simple: "We need to get the American worker back into the workforce." labor market” (Patton, 2012, np). It seems that the simplest way to stimulate economic growth is to reduce the unemployment rate, which should in turn increase production and GDP. However, as in most economic relationships, it is not simply a matter of adjusting one economic factor to improve the other. As we have already noted above, the relationship between GDP and unemployment is established, but not necessarily causal. Therefore, instead of focusing on causality, the following discussion approaches the relationship between GDP and unemployment in terms of modern examples of economic recovery from the financial crisis in 2007. 2008. More specifically, the discussion turns to three major Western economies – the United States, Germany and Canada – to compare economic trends and recovery before and after the recent recession. The discussion also turns to the Chinese economy as an example of a potential exception to Okun's Law and the resulting relationship; more specifically, China's economic changes highlight the fact that Okun's law regarding the relationship between GDP and unemployment can only be applied to already developed and stabilized Western economies. This discussion uses two aspects of the assessment: results from secondary sources regarding these specific countries, as well as an original quantitative description of economic changes in these four countries since 2007, using World Bank data. Secondary Sources on Western Economies and China As mentioned above, many studies have been carried out over the past half century to confirm Okun's Law in the face of economic fluctuations, financial crises, and historical changes. For example, one study found that the relationship varied only slightly in its "responsiveness" to unemployment – using data from 1948 to 2007, one researcher found that Okun's coefficient "declined dramatically in the years 1990 and has since remained at a lower level” (Owyang & Sekhposyan, 2012, p. The bottom line, however, is that the relationship has remained true, and it should prove useful to examine data from specific countries. This article has already mentioned the fact that the relationship between GDP and unemployment remained largely the same in OECD countries between 1960-2008 (Furceri & Mourougane, 2012). OECD? There are several studies that assess this. First, Hoffman and Lemieux (2014) examine unemployment levels during the “Great Recession” in three major Western economies: Germany, Canada and the United States. specifically, the article studied “the reasonspotential of the surprisingly different labor market performances of the [three countries]…during and after the Great Recession of 2008-2009” (Hoffman and Lemieux, 2014, p. 1). As key findings, the study found that the percentage changes in unemployment in the three countries varied considerably: unemployment remained relatively stable in Germany, increased slightly in Canada, and reached considerably higher levels in the United States. United (Hoffman and Lemieux, 2014). ). Given that the Great Recession affected almost all Western economies, one would expect all three countries to experience a drastic change in the unemployment rate, as well as a decrease in the GDP growth rate. So why has the United States seen much greater change in unemployment in recent years? The answer, according to this article, is twofold: First, "construction employment fluctuations linked to the U.S. boom and bust" > real estate markets can explain much of the differences between countries” and second, “compared to pre-recession trends, there was a much larger decline in GDP in the United States than in Germany between 2008 and 2012” (Hoffman & Lemieux, 2014, p Although the first conclusion is not necessarily or inherently crucial to this paper's analysis of GDP growth and unemployment rates, it is nonetheless crucial. provides insight into the reiteration that the. Okun's law is an empirical observation rather than a causal relationship. In other words, the fact that the composition of the United States labor market, largely concentrated around the construction sector during the housing boom, affects the. results of the Okun coefficient, reminds us that the economy does not react well to a “rapid crisis”. "It is multifaceted, and the relationship between GDP and unemployment rates is only one aspect of growth (or lack thereof). The second conclusion of this article, however, highlights the continued validity of the Okun's Law The relationship between GDP and unemployment is reconfirmed by some economic research. Simply put, the United States was hit hardest by the 2008 financial crisis and therefore experienced the largest fluctuations in GDP; and unemployment rates As the authors state, “the differences in unemployment performance between the United States and Germany are entirely consistent with the differences observed in GDP performance” (Hoffman and Lemieux, 2014). , p. 4). Specifically, the authors find that Okun's relationship predicts that the 10 percentage point difference in GDP between the two countries would result in a 5 percentage point difference in unemployment rates. two countries; this is less than two percentage points of the actual difference, which is 6.5 percentage points (Hoffman and Lemieux, 2014, p. 7). Therefore, the relationship appears to be valid in assessing the performance of the Canadian, American and German economies. The relationship is also evidenced by Burgen, Meyer, and Tasci's (2012) graph from their analysis of the modern application of the coefficient. :Representation of Okun's law, using American dataThese authors' analysis draws on data from the last twenty years and found no change in the applicability of Okun's law during the financial crisis and recovery. As with the assessment above, these researchers found that the percentage change in real GDP had a relatively stable relationship with the percentage change in unemployment rates from 2009 to 2011, the early years of the recovery. ChinaThe discussion on China in relation to this relationship between GDP and unemployment gives.

Essay / How Unemployment Affects a Country's Gross Domestic Product and ChinaRepresentation of Okun's Law, using US dataChinaEvaluation of primary dataConclusionThis research This article will examine the relationship between gross domestic product (GDP) and unemployment rates across the world, arguing that both Economic factors are in fact correlated but not necessarily in a causal relationship. The article first reviews the existing literature on the subject, as well as the quantitative evidence available over the last century. In addition to this study, the paper compares Germany, the United States and Canada, and examines recent changes in China. Overall, the paper provides a comprehensive view of the issue through the application of secondary sources and a brief analysis of World Bank data. Through this assessment, the article concludes that this relationship (and Okun's Law) exists in modern economics. Say no to plagiarism. Get a tailor-made essay on “Why violent video games should not be banned”?Get the original essayInverse relationshipsThe effect of unemployment rates on GDP (and vice versa)“Big ideas, big ambitious projects must be embedded in culture at a deeper level than political winds. It has to be deeper than economic fluctuations that might turn people away from an expensive project because they are unemployed and can't feed their families. economic well-being involves many statistical factors. However, there are two factors in particular that all economists agree are important in economic analysis: production and unemployment. First, economists have long been interested in the potential influences and impact of economic output, that is, the amount of output and growth a country produces in a given year. Since the creation of the modern international economy, this has been known as a country's gross domestic product (GDP). The GDP of a country is not only an indicator of the quantity of production of a country in a given year, but can also indicate the overall economic growth of the country compared to the GDP of previous years in the same country. It is one of the most crucial indicators of almost everything about the economy – from potential growth to sustainable economic practices. Second, unemployment rates play an important role in determining the economic well-being of any country, as they are directly linked to an economy's ability to produce and ultimately prove productive in the long run. Unemployment rates became particularly important indicators of recovery in the years following the economic recession of 2008 and 2009. In recent years, economists and policymakers have viewed the unemployment rate as a kind of barometer of economic recovery. In this way, GDP and unemployment rates are crucial to understanding economic stability and growth and are therefore intrinsically linked. This research paper will examine the relationship between gross domestic product (GDP) and unemployment rates across the world, primarily using the recent recession of 2008 as a backdrop. Although the evidence for this relationship is well established, notably through the creation of Okun's Law, this article takes an updated view of the subject, arguing that the two economic factors are in fact correlated but not necessarily in acausal relationship. In brief, the research paper first reviews existing literature on the topic, including an overview of Okun's Law and secondary applications of the concept, as well as available quantitative evidence from the last century. In addition to this review, the article discusses several specific cases highlighting the relationship between growth and unemployment; More specifically, the article compares Germany, the United States and Canada to examine Okun's law more closely, and considers recent changes in China as a possible exception to the coefficient. Overall, the article provides a comprehensive view of Okun's Law, through the application of secondary sources. and a brief analysis of World Bank data. Through this assessment, the article concludes that the relationship between GDP and unemployment rates (and Okun's Law) exists in the modern economy. This is not an exhaustive account of these major economic factors, but rather an adaptation of existing law and research into a unique qualitative and slightly quantitative overview of the modern implications of the relationship between them – particularly in the extent to which both economic factors are linked to the recovery from the 2008 recession.Literature reviewEconomic well-beingOne of the main functions of economics is to determine the economic well-being and prospects of individual economies and of the global economy as a whole. Drivers of this well-being and potential include economic inputs and output, unemployment rates, industrial growth, supply and demand, capital flows, financial crises, etc. In recent years, and especially since the 2008 financial crisis, economists and policymakers have turned to two specific factors as main indicators of economic well-being and recovery from recession: the change in gross domestic product (GDP) and the unemployment rate. . More specifically, potential GDP growth is described as “the rate of real GDP growth that could be sustained with a full employment economy and stable inflation” (Higgins, 2011, p. 2). Therefore, expected GDP is one of the most important factors of economic stability – and, as this article demonstrates, it is intrinsically linked to the unemployment rate in developed economies. This has been particularly true in Western developed countries which have been hardest hit by the crisis. the economic recession (Furceri & Mourougane, 2012). In fact, one study found that financial crises like the recession triggered in 2008 can "reduce potential output by about 1.5 to 2.4 percent on average, with most of the impact coming from the effect on capital” (Furceri, Mourougane, 2012, 822). . It is also interesting to note that these authors found that the overall impact of a financial crisis like that of 2008 varies "depending on the structural characteristics of economies, such as the degree of openness, macroeconomic imbalances, financial deepening and the quality of the economy. of governance” (Furceri & Mourougane, 2012, p. 822). This is a point that will be assessed later in this article, but for now it is enough to recognize that the recovery of Western economies depends largely on GDP and unemployment rates – and on the empirical (even causal) relationship between both. It is also important to note at this point the importance of considering longitudinal data in determining economic well-being. As Baumol (1986) said almost thirty years ago: “Anxiety can attract attention, but it does not necessarily aid clear thinking” (p. 1072). The economist goes on to say that concerns about economic growth atlong term do not necessarily “recognize that an adequate economic analysis of these questions requires a careful study of economic history” (Baumol, 1986, p. 1072). In other words, determining economic recovery and well-being is largely a process of historical economic analysis. The author concludes that it is important to consider the "long term" "because it is unreasonable for economists and policy makers to attempt to discern long-term trends and their outcomes from the flow of short-term developments, which may be dominated by transient conditions. (Baumol, 1986, p. 1084). In this way, this research paper attempts to draw on historical data as well as economic changes since 2008. Policymakers and academics would do well to consider overall historical trends when assessing the relationship between GDP and rates. unemployment. Okun's Law Nearly fifty years old, Okun's law (or coefficient) has proven to be one of the most precise and durable empirical relationships in macroeconomics. Most of the economic literature that assesses the relationship between GDP and unemployment rates today, particularly as signals of recession or economic recovery, relies on this established empirical relationship. As Higgins (2011) puts it, Okun's Law essentially describes the relationship as follows: "If GDP grows quickly, the unemployment rate decreases, if growth is very low or negative, the unemployment rate increases, and if growth is equal to potential, the unemployment rate remains unchanged” (p.2). In other words, there is an inverse empirical relationship between the unemployment rate and GDP in a given country; as GDP increases, unemployment rates decrease, and vice versa. This theory was developed by Okun in 1962, based on data dating from 1947 to 1960 (Okun 1962). Specifically, the coefficient created by Okun predicted that “each percentage point of the unemployment rate above four percent was associated with a decline in real GNP of approximately three percent” (Fidrmuc and Huang, 2015, p. 2). . More than fifty years after this empirical contribution, the Okun coefficient (now known as "Okun's law") is still accepted as a fundamental empirical relationship in macroeconomics. Owyang, Vermann, and Sekhposyan (2013) provide a detailed overview of Okun's Law and present a graph to highlight the empirical relationship. The graph is reproduced here.The relationship according to OkunOwyang's law, Vermann and Sekhposyan, 2013, p. 2. The authors explain that Okun attempted to identify the relationship between two variables: "the difference between the actual level of production and its potential" and "the difference between unemployment and its natural rate" (Owyang, Vermann and Sekposyan , 2013, p.2). By way of explanation, the authors argue, “potential output is not the maximum that an economy could theoretically produce, but a lower and sustainable figure” (Owyang, Vermann and Sekposyan, 2013, p. 2). In this way, Okun's Law is more of a description of the relationship between factors that affect economic growth, rather than a static and unchanging relationship. In this discussion, it is worth mentioning how the Okun coefficient has withstood economic tests over the past half century. For the most part, the empirical relationship has stood the test of time, and most economists agree that this relationship has held true over the past fifty years of economic change (Fidrmuc and Huang, 2015; Hoffman and Lemieux , 2014; Burgen, Meyer and Tasci, 2012). However, this is an important caveat in the continued acceptance of Okun's Law: there is a relationship, but not necessarilycausal. As Burgen, Meyer, and Tasci (2012) conclude, it is crucial to recognize “that Okun's Law is only an empirical relationship. This does not necessarily reflect a structural link between output growth and the unemployment rate. Additionally, the relationship could change over time as labor market dynamics evolve” (np). Similarly, Fidrmuc and Huang (2015) point out that the law is “an empirically rather than theoretically observed relationship” and that it “stipulates a correlation and says little about whether the direction of causality is from growth to unemployment or vice versa.” » (p.5). Therefore, the subsequent discussion of the case studies and empirical evidence does not attempt to establish a causal relationship, but simply an overview of the modern adaptation to Okun's Law. GDP, Unemployment Rates, and Economic Growth According to the average political pundit or economic commentator, the economic implication of the Okun Act following the 2008 financial crisis is quite simple: "We need to get the American worker back into the workforce." labor market” (Patton, 2012, np). It seems that the simplest way to stimulate economic growth is to reduce the unemployment rate, which should in turn increase production and GDP. However, as in most economic relationships, it is not simply a matter of adjusting one economic factor to improve the other. As we have already noted above, the relationship between GDP and unemployment is established, but not necessarily causal. Therefore, instead of focusing on causality, the following discussion approaches the relationship between GDP and unemployment in terms of modern examples of economic recovery from the financial crisis in 2007. 2008. More specifically, the discussion turns to three major Western economies – the United States, Germany and Canada – to compare economic trends and recovery before and after the recent recession. The discussion also turns to the Chinese economy as an example of a potential exception to Okun's Law and the resulting relationship; more specifically, China's economic changes highlight the fact that Okun's law regarding the relationship between GDP and unemployment can only be applied to already developed and stabilized Western economies. This discussion uses two aspects of the assessment: results from secondary sources regarding these specific countries, as well as an original quantitative description of economic changes in these four countries since 2007, using World Bank data. Secondary Sources on Western Economies and China As mentioned above, many studies have been carried out over the past half century to confirm Okun's Law in the face of economic fluctuations, financial crises, and historical changes. For example, one study found that the relationship varied only slightly in its "responsiveness" to unemployment – using data from 1948 to 2007, one researcher found that Okun's coefficient "declined dramatically in the years 1990 and has since remained at a lower level” (Owyang & Sekhposyan, 2012, p. The bottom line, however, is that the relationship has remained true, and it should prove useful to examine data from specific countries. This article has already mentioned the fact that the relationship between GDP and unemployment remained largely the same in OECD countries between 1960-2008 (Furceri & Mourougane, 2012). OECD? There are several studies that assess this. First, Hoffman and Lemieux (2014) examine unemployment levels during the “Great Recession” in three major Western economies: Germany, Canada and the United States. specifically, the article studied “the reasonspotential of the surprisingly different labor market performances of the [three countries]…during and after the Great Recession of 2008-2009” (Hoffman and Lemieux, 2014, p. 1). As key findings, the study found that the percentage changes in unemployment in the three countries varied considerably: unemployment remained relatively stable in Germany, increased slightly in Canada, and reached considerably higher levels in the United States. United (Hoffman and Lemieux, 2014). ). Given that the Great Recession affected almost all Western economies, one would expect all three countries to experience a drastic change in the unemployment rate, as well as a decrease in the GDP growth rate. So why has the United States seen much greater change in unemployment in recent years? The answer, according to this article, is twofold: First, "construction employment fluctuations linked to the U.S. boom and bust" > real estate markets can explain much of the differences between countries” and second, “compared to pre-recession trends, there was a much larger decline in GDP in the United States than in Germany between 2008 and 2012” (Hoffman & Lemieux, 2014, p Although the first conclusion is not necessarily or inherently crucial to this paper's analysis of GDP growth and unemployment rates, it is nonetheless crucial. provides insight into the reiteration that the. Okun's law is an empirical observation rather than a causal relationship. In other words, the fact that the composition of the United States labor market, largely concentrated around the construction sector during the housing boom, affects the. results of the Okun coefficient, reminds us that the economy does not react well to a “rapid crisis”. "It is multifaceted, and the relationship between GDP and unemployment rates is only one aspect of growth (or lack thereof). The second conclusion of this article, however, highlights the continued validity of the Okun's Law The relationship between GDP and unemployment is reconfirmed by some economic research. Simply put, the United States was hit hardest by the 2008 financial crisis and therefore experienced the largest fluctuations in GDP; and unemployment rates As the authors state, “the differences in unemployment performance between the United States and Germany are entirely consistent with the differences observed in GDP performance” (Hoffman and Lemieux, 2014). , p. 4). Specifically, the authors find that Okun's relationship predicts that the 10 percentage point difference in GDP between the two countries would result in a 5 percentage point difference in unemployment rates. two countries; this is less than two percentage points of the actual difference, which is 6.5 percentage points (Hoffman and Lemieux, 2014, p. 7). Therefore, the relationship appears to be valid in assessing the performance of the Canadian, American and German economies. The relationship is also evidenced by Burgen, Meyer, and Tasci's (2012) graph from their analysis of the modern application of the coefficient. :Representation of Okun's law, using American dataThese authors' analysis draws on data from the last twenty years and found no change in the applicability of Okun's law during the financial crisis and recovery. As with the assessment above, these researchers found that the percentage change in real GDP had a relatively stable relationship with the percentage change in unemployment rates from 2009 to 2011, the early years of the recovery. ChinaThe discussion on China in relation to this relationship between GDP and unemployment gives.

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