Okun's Law


The dose negative relationship between the rate of unemployment and the ratio of actual gross national product to full employment G.N.P. It was fust pointed out by A. Okun in 1962. In the United States the relationship in the 1960s and 1970s was such that a one percentage point change in the rate of unemployment was matched by a one-third percentage point change in the opposite direction in the ratio of actual to full employment G.N.P.

Reference: The Penguin Dictionary of Economics, 3rd edt.