Using Beveridge-Nelson or Hodrick-Prescott decomposition, it can be applied to business cycles. Due to its static nature and lack of causality, it is often replaced by the mor
Using Beveridge-Nelson or Hodrick-Prescott decomposition, it can be applied to business cycles. Due to its static nature and lack of causality, it is often replaced by the more dynamic model of Martin Zagler. Other variations on it include a Vector Autoregression approach by Blanchard, and one which included expectational variables by Milton Friedman, who has also related it to the Philips Curve. It implies that an increase in labor productivity will cause "jobless growth," and according to its formulator its factor "a" is approximately .3.  FTP, identify this economic law that describes the relationship between unemployment and the GNP gap, named for an American economist whose first name is Arthur.
Using Beveridge-Nelson or Hodrick-Prescott decomposition, it can be applied to business cycles.
Okun's Law