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Labour Markets in the Global Financial Crisis: The Good, the Bad and the Ugly

Published online by Cambridge University Press:  01 January 2020

Mary C. Daly ,
John G. Fernald ,
Òscar Jordà  and
Fernanda Nechio
Fernanda Nechio
Affiliation:
Federal Reserve Bank of San Francisco
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Abstract

This note examines labour market performance across countries through the lens of Okun's Law. We find that after the 1970s but prior to the global financial crisis of the 2000s, the Okun's Law relationship between output and unemployment became more homogenous across countries. These changes presumably reflected institutional and technological changes. But, at least in the short term, the global financial crisis undid much of this convergence, in part because the affected countries adopted different labour market policies in response to the global demand shock.

Keywords

Okun's Lawlabour marketslabour hoardingE24E27
Type
Research Articles
Information
National Institute Economic Review , Volume 228 , May 2014 , pp. R58 - R64
Copyright
Copyright © 2014 National Institute of Economic and Social Research

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Footnotes

This paper is a somewhat extended version of Daly et al. (2013b). We thank Bart Hobijn, Dawn Holland, Simon Kirby, Ron Smith and Garry Young and participants at the Bank of England for helpful comments.

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