Slacking Off

Brad DeLong reminds us of Okun’s Law.  Okun’s Law is derived from the following scatter plot showing that typically an increase in unemployment happens in tandem with GDP declines.  That in an economy that isn’t running at it’s full potential it seems obvious that everything, consumption, labor, capital equipment, etc. etc. wouldn’t be running at their full potential has always seemed obvious to me, but then that never stopped people from raising objections.

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