Lecture 10 - Arthur Okun (1928 1980) He served as the...

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Arthur Okun (1928 – 1980) He served as the chairman of the Council of Economic Advisors between 1968 and 1969. Before serving on the C.E.A., he was a professor at Yale, and afterwards was a fellow at the Brookings Institution in Washington, D.C. Okun’s Law - for every one percentage point by which the actual unemployment rate exceeds the so-called “natural rate of unemployment, real GDP is reduced by 2% to 3%.
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The Self Correcting Market Eventually the market will correct undesirable business behaviors How long is too long to wait? What damage do we allow while we wait for the market to correct itself?
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Okun vs. Friedman Draw the line differently Okun advocates a broader role for government in checking or constraining the exercise of firms’ pure self interest
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Okun’s Views We shouldn’t just consider efficiency when we think about how to structure an economy… He urges us to think about equality and fairness
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Okun’s Views Your performance in the economy depends on the endowments you had when you approached the market… your income
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Lecture 10 - Arthur Okun (1928 1980) He served as the...

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