The Meaning of Okuns Law in Economics

The Meaning of Okuns Law in Economics In economics, Okuns Law describes the relationship between production output and employment. In order for manufacturers to produce more goods, they must hire more people. The inverse is also true. Less demand for goods leads to a decrease in production, in turn prompting layoffs. But in normal economic times, employment rises and falls in direct proportion to the rate of production at a set amount. Who was Arthur Okun? Okuns Law is named for the man who first described it, Arthur Okun (Nov. 28, 1928- March 23, 1980). Born in New Jersey, Okun studied economics at Columbia University, where he received his Ph.D. While teaching at Yale University, Okun was appointed to President John Kennedys Council of Economic Advisors, a position he would also hold under Lyndon Johnson. An advocate of Keynesian economic policies, Okun was a firm believer in using fiscal policy to control inflation and stimulate employment. His studies of long-term unemployment rates led to the publication in 1962 of what became known as Okuns Law. Okun joined the Brookings Institution in 1969 and continued to research and write about economic theory until his death in 1980. He also is credited with defining a recession as two consecutive quarters of negative economic growth. Output and Employment In part, economists care about a nations output (or, more specifically, its Gross Domestic Product) because output is related to employment, and one important measure of a nations well-being is whether those people who want to work can actually get jobs. Therefore, its important to understand the relationship between output and the unemployment rate. When an economy is at its normal or long-run level of production (i.e. potential GDP), there is an associated unemployment rate known as the natural rate of unemployment. This unemployment consists of frictional and structural unemployment but doesnt have any cyclical unemployment associated with business cycles. Therefore, it makes sense to think about how unemployment deviates from this natural rate when production goes above or below its normal level. Okun originally stated that the economy experienced a 1 percentage point increase in unemployment for every 3 percentage point decrease GDP from its long-run level. Similarly, a 3 percentage point increase in GDP from its long-run level is associated with a 1 percentage point decrease in unemployment. In order to understand why the relationship between changes in output and changes in unemployment is not one-to-one, its important to keep in mind that changes in output are also associated with changes in the labor force participation rate, changes in the number of hours worked per person, and changes in labor productivity. Okun estimated, for example, that a 3 percentage point increase in GDP from its long-run level corresponded to a 0.5 percentage point increase in the labor force participation rate, a 0.5 percentage point increase in the hours worked per employee, and a 1 percentage point increase in labor productivity (i.e. output per worker per hour), leaving the remaining 1 percentage point to be the change in the unemployment rate. Contemporary Economics Since Okuns time, the relationship between changes in output and changes in unemployment has been estimated to be about 2 to 1 rather than the 3 to 1 that Okun originally proposed. (This ratio is also sensitive to both geography and time period.) In addition, economists have noted that the relationship between changes in output and changes in unemployment is not perfect, and Okuns Law should generally be taken as a rule of thumb as opposed to as an absolute governing principle since it is mainly a result found in the data rather than a conclusion derived from a theoretical prediction. Sources: Encyclopaedia Brittanica staff. Arthur M. Okun: American Economist. Brittanica.com, 8 September 2014. Fuhrmann, Ryan C. Okuns Law: Economic Growth And Unemployment. Investopedia.com, 12 February 2018. Wen, Yi, and Chen, Mingyu. Okun’s Law: A Meaningful Guide for Monetary Policy? Federal Reserve Bank of St. Louis, 8 June 2012.

Comparing bluetooth technology and infrared Essay

Comparing bluetooth technology and infrared - Essay Example The following paper analyses the relative advantages of all three. Bluetooth is an always-on, short-range radio based technology that resides on a microchip. Controlled and moderated by the Bluetooth Special Interest Group, this short range wireless communication technology started off as a utility to enable laptop users to make calls via a mobile phone. It was commissioned by the mobile phone company Ericsson but soon started spreading. The concept behind the technology is fairly simple. It uses a 2.4 GHz band to connect blue tooth devices that may be within ten meters of each other to share at up to 720 Kbps (How Bluetooth Works). This technology can operate with many users to create a piconet, further networks of which allow larger communication. Safety and privacy is assured through encoding each link, thus not allowing third parties to access the data being transferred without the relevant PIN code or authorization. As a radio broadcast communication system is being utilized here, line of sight communication is not a problem in the case of Blu etooth technology. This leads to many possible applications of this technology. First of all wireless communication between various devices such as personal computers in small network or between mobile phones or between a personal computer and its connecting devices such as mouse and keyboard can be employed. This leads to easy communication without the use of long wires that can easily occupy useful space and is unseemly to the eyes and in cramped computer rooms. Game consoles use this technology to allow communication between the processing machine and the controllers. Dial-up internet facility on Personal Digital Assistants makes use of Bluetooth as well. Seeing the range of applications of this technology, one can surmise that it has some obvious benefits. First of all, it replaces serial equipment making use of wires spreading everywhere and allows easy communication with devices near it. There is the further advantage of mobility, where the user is not required to be tethered to the electronic device to be able to use a Bluetooth active device. Such practical advantages make its use worthwhile and convenient. Unlike the Infra Red technology discussed later, it does not require the connecting devices to be in line of sight which gives it an advantage in terms of range over Infra red enable devices. However, there are many disadvantages as well. As many applications as it has, Microsoft chose to not include Bluetooth support in its new operating system as it claimed there were still not many Bluetooth enables devices that required Windows support (How Bluetooth Works). This limits its uses for personal computer users who make use of the Windows operating system. Furthermore, the microchip that is required for Bluetooth technology can be labeled relatively expensive. This presents a challenge to its use in mobile phones which are hugely competitive in terms of prices and companies may see costs rising. This diminishes its extended use by the mobile phone industry unless its cost drops. There is also the problem of security. A number of weaknesses have been pointed out in Bluetooth's pin number based production of a device's initiation key. This can lead to possible cracks in security, allowing a third

The relationship between changing of labor force(total labor number ) Research Paper - 2

The relationship between changing of labor force(total labor number ) and Unemployment rate - Research Paper Example The drop was sharp in 2002 heightened by the global financial crisis where most firms were laid off their staff. However, the situation was later on put under control (STOICA, pp.3-7). Additionally, the study that was carried out in the same locality indicated that a decline in the population caused the number of employable persons to fall. It was that the number decreased by more than 13900 people. There were low rates of migration into the locality, low birth rates, high mortality rates and a great number of the aging population. The factors caused the total number of labor to decrease sharply (STOICA, pp.3-7). However, the trend was slightly different in other localities where there was an increase in the labor force due to a population increase. More so, most of the people chose to reside in urban settlements where employment opportunities were more available than rural areas. Additionally, the demographic indicators within the area indicated population increase was as a result of increase birth rates, low mortality rates, increased population due rural to urban migration (STOICA, pp.4-5). Shierholz, (paras.1-3)came up with a report that indicated there was a decrease in labor force participation between 2008 to 2012.The decline was about 2.5% from the previous years where the participation was 66.2%.Due to the decline, the rate of unemployment reduced significantly. A decrease in labor participation was caused by unwillingness by most of the people to seek for employment opportunities because of low wages that were being offered in the job market. However, he indicated that if industries provided lucrative job opportunities, there was a possibility for the market to be by prospect job seekers hence raising the rate of unemployment in an economy. Plumer, (2013) showed that the labor force in the US was sharply weakening. According to his publication, about 66% of Americans had managed to secure a job vacancy or were still in the

Is Jealousy Ever a Good Thing Essay Example for Free

Is Jealousy Ever a Good Thing Essay Jealousy has always been one of the meanest quality of mankind. What is worse is that, it is almost inevitable. In one way or another, jealousy enters our lives, naturally and sometimes unconsciously, creating suffering for ourselves and others. As events from history and daily life have shown, human’s failure to stay away from this instinct has led to ruined relationships, suffering for everyone involved, and even demoralization. Let’s take Cesare Borgia as an example of how dangerous jealousy is to human. As the oldest son of the powerful Pope Alexander VI of Vatican, Cesare is said to have everything, from wealth to land and power. Compared to his brother Giovanni, however, Cesare himself felt inferior. He was sick of seeing Giovanni taking away from him beautiful women and more affection from the Pope, as well as losing more important military duties and national honor in to his brother. In situations like this, it is human nature to feel jealous, but Cesare’s extreme envy led him to kill his brother. Now having gained absolute power, it is ironic that Cesare was still not happy. His father was so upset that he imprisoned himself in a palace for a long time, and Cesare was detested by Giovanni’s wife and many family members. From the story, it is startling how jealousy can make people do crazy things and turn brotherhood into rivalry, degrading moral values and causing agony to everyone. Daily life proves to be a huge source of evidences for the negative effects of jealousy. I feel sad to see the way some of my friends at school treat each other like rivals. Because of excessive competitiveness in academics, the scene of some classmates making fun of somebody else’s low grade is not uncommon. I am astonished at the way many students turn so indifferent whenever I ask them for help with my homework, and the way they wish each other to fail exams so that they can climb to the top of the class. People may argue that being jealous of others’ success gives them extra determination. They must have not realized that friendship is more important than superficial achievements. By being jealous, they actually develop a selfish attitude, and sacrifice what may have become their lifelong friendships. Among the many ways to achieve our goals, being jealous is absolutely the worst one, for proofs from both history and daily life have shown that it can destroy friendships and creates rivalry. Unless people can avoid it and take others’ success as a model and motivation for themselves to make progress, they will never have what they want.

The Government Should Respect Property Rights Essay -- Expository Exem

The Government Should Respect Property Rights Imagine you’ve been enjoying your backyard picnic table and chairs for the past 10 years when suddenly, for no apparent reason, you are served notice from a government agency that you will be fined $6,000 a day unless you remove them. Or, imagine you would like to add a stone walkway to your garden. You begin to research the procedure and costs, only to learn that a lengthy application will be required, with multiple hearings before a state commission. You find yourself embroiled in a Kafkaesque legal battle costing tens of thousands of dollars. Finally, after years of struggle the government demands, as a condition for approving your little walkway, that you â€Å"donate† a portion of your land to the state. Do these sound like nightmarish stories out of some totalitarian regime? Shockingly, they are normal, everyday incidents for property owners across the nation. In California, for example, a state agency called the California Coastal Commission routinely tramples the property rights of coastal landowners. People residing within five miles inland of California’s 1,100 miles of coastline are subject to the commission’s power to approve or deny improvements involving â€Å"any solid structure† on their property. This can include adding a room to a home, planting trees, adding a fence or garden walkway and, yes, in one current Orange County case, a picnic table and chairs. Established in 1976, the California Coastal Commission’s mandate is to â€Å"preserve, protect . . . and restore the resources of the coastal zone for the enjoyment of the current and succeeding generations.† The Commission operates on the premise that the roughly 1.5 million acres under its jurisdiction are a... ...erty without permission from his tenant. Near San Francisco certain homes designated as â€Å"affordable† can be sold for no more than a government-controlled price. In Portland there are wide swaths of the city in which one cannot build a single-family home on one’s own land, even if it is adjacent to other suburban homes. In hundreds of U.S. cities, various laws establishing â€Å"historical districts,† â€Å"landmarks,† or â€Å"improvement zones† straightjacket owners who are consequently unable to remove trees, erect fences, add rooms, or even change rain gutters. Government boards, agencies and commissions with this kind of authority should be opposed not on a case-by-case basis, but on principle. The only proper state policy with respect to private property is: hands off! In America, no governmental agency should have the power to deprive an individual of his property rights.

Prostitution, Promiscuity and Venereal Disease

PROSTITUTION †¢Prostitution is the act or practice of providing sexual services to another person in return for payment. †¢Prostitution is one of the branches of the sex industry. The legal status of prostitution varies from country to country, from being a punishable crime to a regulated profession. †¢Prostitution is sometimes referred to as â€Å"the world's oldest profession†. Causes of Prostitution: 1) Poverty and unemployment has triggered the rapid spread of prostitution in the Philippines. It provides those involved in this profession a considerable amount of income to support their families as well as supply a steady flow of remittances from urban to rural areas or from prostitutes working overseas. 2) Women have been tricked into prostitution with guarantees of decent job opportunities in the city or abroad or have been kidnapped and then forced to work as prostitutes. 3) Family expectations and problems are common factors why many enter the prostitution business. Women in particular are pressured to pay for their sibling’s education or support a sick family member. Other aspects such as dysfunctional families or constant abuse from parents have lead adolescents to leave their homes and are attracted by the easy profits from prostitution. VENEREAL DISEASE †¢A disease that is contracted and transmitted by sexual contact, caused by microorganisms that survive on the skin or mucus membranes, or that are transmitted via semen, vaginal secretions, or blood during intercourse. Because the genital areas provide a moist, warm environment that is especially conducive to the proliferation of bacteria, viruses, and yeasts, a great many diseases can be transmitted this way. They include AIDS, Chlamydia, genital warts, gonorrhea, syphilis, yeast infections, and some forms of hepatitis. Also known as a morbus venereus or sexually transmitted disease (STD). PROMISCUITY †¢Refers to â€Å"casual sex† with multiple sexual partners. The term can carry a moral judgment and is viewed in the context of the mainstream social ideal for sexual activity to take place within exclusive committed relationships. A common example of behavior viewed as promiscuous within the mainstream social ideals of many cultures is a one night stand. †¢One scientific study found that promiscuous men and women are judged equally harshly and both genders express strong preference for sexually conservative partners.

Power Has Many Definitions - Free Essay Example

Sample details Pages: 2 Words: 749 Downloads: 2 Date added: 2019/07/30 Category Literature Essay Level High school Tags: King Lear Essay William Shakespeare Essay Did you like this example? Power has many definitions, but in King Lear, power seems to be defined as ones ability or capacity too direct and influence others as well as the current course of events. Power is incredibility corruptive and this is proven many times over by the main characters of the play. King Lear serves as an excellent commentary on the nature of political power, while also showcasing a brutal portrayal of authority when it goes wrong. The play does a great deal of reflecting on how the nature of power affects individuals as well as larger groups. The play showcases time It must be noted that both King Lear and Gloucester both consistently turn away or ignore the individuals who have the best intentions for them. They are so afraid of losing their dominance that they both mistrust their most loyal children. Their power has made them increasingly blind to the people they surround themselves with; King Lears oldest two daughters clearly have no love for him and scheme to take his power, yet the two most trustworthy people in his circle, Cordelia and Kent, are treated with scorn and punished. Don’t waste time! Our writers will create an original "Power Has Many Definitions" essay for you Create order Lear has become pompous and shallow in his time as king, and obviously prefers flattery to honesty. This seems to be a common side effect of unchecked power, and this is without a doubt King Lears undoing. He is unable to understand what really matters and values the fake flattery of his bad daughters over the honesty of his daughters, which ends up causing chaos for himself, his family and the rest of Britain. King Lears fear of losing relevance and authority ironically creates a self-fulfilling prophecy, and his own actions result in his downfall. Power is shown many times throughout the play to be incredibly corruptive. Gloucesters title and power are largely responsible for the rift between him Edmund. He feels the need to distance himself from Edmund because he is a bastard, and he consistently reminds Edmund of that fact. Power makes Gloucester put his power above his family, and this results in tragedy for all. Gloucester was blind to his faults, and because of his blindness he was eventually actually blinded in an ironic, terrible twist of fate. Had Gloucester loved and treated his bastard son the same way he loved and treated his legitimate son Edgar, much of the tragedy that took place in the play could have been avoided. The play leads us to understand just how much wickedness in people power inspires. Edmund starts out as a character who inspires sympathy, but quickly becomes one of the plays leading villains in his hunt for recognition and authority. Edmund is not a villain at first, but we are clearly show how easily the hunt for power leads to betrayal, and how easily is can affect ones character. Goneril and Regans are villains from the start of the play, but their thirst for power transforms them into actual evil beings. The sisters go from simply scheming to steal parts of their fathers kingdom to planning war against other countries and actual murder. Goneril murders her own sister in her quest for dominance, and this is probably the harshest example in the play of the wickedness of power. One of the most important lessons that can be taken from the play is the finality of mistakes. King Lear sets the stage for his demise at the very beginning of the play; he banishes the only daughter that truly loves him, and gives all his power and his kingdom to his scheming evil daughters. Gloucester also has a hand in his own untimely end, as his continued alienation of his bastard son causes bitterness in his son, leading Edmund to betray his family. Even at the end of the play mistakes ring with finality, when Edmund wishes to make up for his wrongdoings and save Cordelia, but the girl has already been put to death. King Lear is a classic example of the corrupting potential of power its downfalls. The majority of the characters that come into some sort of power meet their ends, often orchestrating their own demises in their attempts to gain authority. King Lear raises many important questions about power and its nature, but one thing is clear: the definition of power is flexible, but the reality of it is not. Power is not a tangible object; it only has the weight that it is given. Power is what you make it and nothing more.