Time Variation in Okuns Law: A Canada and U.S. Comparison by Kimberly Beaton, International Economic Analysis Department, Bank of Canada, Ottawa, Ontario, Canada.
“This article investigates the stability of Okuns law for Canada and the United States using a time varying parameter approach. Time variation is modeled as driftless random walks and is estimated using the median unbiased estimator approach developed by Stock and Watson (1998). Okuns law exhibits structural instability in both countries, with the sensitivity of the unemployment rate to movements in output growth increasing recently over time in both Canada and the United States.”
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