Date of Award

2014

Document Type

Thesis

Degree Name

Bachelors

Department

Social Sciences

First Advisor

Khemraj, Tarron

Keywords

Okun’s Law, Post-War, United States, Economics

Area of Concentration

Economics

Abstract

In this thesis, I examine the stability in the post-war period of the gap version of the Okun relationship by estimating a time-varying parameter with a Kalman filter algorithm. I then propose labor’s share of income as a cointegrating series for our estimated time-series. Using post-war data for the United States, I find that the Okun coefficient has increased in absolute value significantly since 1980 and that much of the change can be explained by the fall in labor’s share of income during the same time period.

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