• Summay of the parper
• Fidnings
• Tools

• An empirical study on Okun’s model with respect to age cohorts
• Data was derived from OCED from 1998 to 2012. (15 years)
• They used the difference model and the gap model in their analysis.

• Yonger cohort was the most vulnable to business cycle especially during the great recession.
• Main reasons for higher coefficient of younger generation can be ascribe to a lack of working experience and schoot to work transitions(?)
• During some period, Okun’s law was not fitted to the real data.
• Okun’s model might be too simple to include all factors affecting economic and unemployment in a ecnomy.

In the paper, tow models were used again; the difference model and the gap model

The Difference Model \[ \Delta y_t = \alpha + \beta(\Delta x_t / x_t) + \varepsilon_t, \hspace{1cm}T = 2,...T \]

The Gap Model \[ y_t - y_t^g = \beta(x_t - x_t^g) + \varepsilon_t \\ \] Note: \(y_t^g\), \(x_t^g\) respectively represents the natural rate of unemployment and potential output. They are not observable.

• Zanin, L. (2014). On Okun’s law in OECD countries: An analysis by age cohorts. Economics Letters, 125(2), 243–248.