1 The point where this line intersects the y axis, in other words the intercept of the regression line, could be regarded as an estimate of the trend growth, given that such a rate of growth would leave the unemployment rate unchanged. Looking at the data after 2001, we can see that the relationship between unemployment and growth has changed.
The regression line is much flatter and has shifted lower after Q4 2000. The change is more pronounced after the so-called Paribas shock of August 2007. This implies that the trend growth is significantly lower than it used to be, at least for the time being. 1.3.