This paper studies the relationship between the change in the unemployment rate and output growth using an approach … based on labor market flows. The framework shows why the Okun coefficient may be constant/time-varying and/or symmetric …/asymmetric and that the outcome lies with the behavior of the labor flows in response to growth. The encompassing framework nests the …

interact and affect the evolution of unemployment rates and participation rates, the two main indicators of labour market … performance. Our analysis has two special features. First, apart from the two labour market states - employment and unemployment … that a shock to the net flow from unemployment to employment drive the unemployment rate and the participation rate in …

Our paper revisits Okun's relationship between observed unemployment rates and output gaps. We include in the … unemployment rate) over time. The Okun coefficient is not only different for young, prime-age and older workers, it decreases with … reducing the overall unemployment rate, it will also have the distributional effect of lowering youth unemployment. …