Will recovery be jobless? A broad array of analysts, from Vox columnists to McKinsey, are arguing that Okun’s Law is broken. This column presents new research suggesting that, in fact, Okun is alive and well. When output recovers, the jobs will come back, although employment will differ across countries. There may be good reasons for the structural reforms that many propose as a way to boost job creation, but undertaking them in the belief that Okun’s Law has broken down should not be one of them.
Laurence Ball, Daniel Leigh, Prakash Loungani, 26 January 2013
Guillermo Calvo, Fabrizio Coricelli, Pablo Ottonello, 24 July 2012
Economic output in the US seems to have recovered since the Great Recession – but jobs have not. This ‘jobless recovery’ has led economists to argue that unemployment has reached a point where it can fall no further without further inflation. This column disagrees, suggesting the nature of the crisis affects the nature of the recovery.
Robert J. Gordon, 22 August 2011
The US is missing millions of jobs. This column argues that the total is 10.4 million. It claims that 3 million of these can be traced to the weakened bargaining position of labour and the growing assertiveness of management in slashing costs to maintain share prices. Moreover, this employment gap is not shrinking because of the ‘double hangover’ effect—an excess housing supply and besieged consumers unwilling to spend.
Roger Farmer, 05 October 2009
Has the US recession already ended? This column says that it very likely has, based on evidence from the last fourteen recessions. It predicts that the NBER will declare that the recession ended in May 2009. But that doesn't rule out the dangers of a double dip or jobless recovery.