Okun's Law
Okun's Law definition - business
Okun's Law
The negative relationship between changes in a nation's unemployment rate and its ratio of actual to potential output. Economist Arthur Okun's research beginning in the 1950s indicated an approximate 1% increase in the unemployment rate was accompanied by a 3% decline in the ratio of actual output to potential output. Subsequent investigations indicated technological changes have caused the ratio to narrow.
The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.
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