Free Trade is managed by the invisible hand.
HoffmanJohn
Jr. Member
Posts: 1,951
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« on: February 06, 2010, 06:41:05 PM » |
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It is not perfect but unemployment and GDP have a strong correlation, and because GDP reflects the business cycle I would have to say that okun's law cannot be defeated by someone who says" correlation does not imply causation". This is because Okun's law accounts for the extraneous variable and thus the correlation implies causation.
okun's law makes perfect sense because it statistically illustrates how the labor market is a lagging statistic when compared to GDP.
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