Macroeconomic Mystery: U.S. Unemployment Subverts Okun's Law

Okun’s law, posited by economist Arthur Okun, states that a 2 percent decline in output will be accompanied by a 1 percent rise in unemployment. That relationship, proven repeatedly over the past several decades, frayed during the recession and the plodding recovery that followed: Unemployment shot up faster than expected in the depths of the crisis, then fell more quickly than would be indicated by anemic U.S. growth.

Applegate is a graphics editor for Bloomberg Businessweek in New York. Follow him on Twitter @evanapplegate.

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