The author wishes to thank the editor, two anonymous referees, James Morley, Mike Bradley, Steve Fazzari, Fred Joutz, Tom King, Oleg Korenok, Dave Ribar, John Roberts, Roberto Sameniego, Christoph Schleicher, Dan Sichel, Herman Stekler, Eric Zivot, and many seminar participants for helpful comments. Amr Moubarak provided helpful research assistance. All remaining errors are my own.
The Relationships between Permanent and Transitory Movements in U.S. Output and the Unemployment Rate
Article first published online: 25 MAR 2009
© 2009 The Ohio State University
Journal of Money, Credit and Banking
Volume 41, Issue 2-3, pages 529–542, March-April 2009
How to Cite
SINCLAIR, T. M. (2009), The Relationships between Permanent and Transitory Movements in U.S. Output and the Unemployment Rate. Journal of Money, Credit and Banking, 41: 529–542. doi: 10.1111/j.1538-4616.2009.00220.x
- Issue published online: 25 MAR 2009
- Article first published online: 25 MAR 2009
- Received January 17, 2007; and accepted in revised form April 8, 2008.
- unobserved components;
- business cycle;
- trend GDP;
- cyclical unemployment;
- natural rate of unemployment
This paper estimates the permanent and transitory movements in U.S. output and the unemployment rate and the relationships between them. The results suggest that permanent movements in U.S. output and the unemployment rate are important for explaining overall fluctuations. Further, the correlation between changes in these series arises in large part due to the relationship between their permanent components.