Two Ways To Measure GDP Give Us Two Okun Results

As the last two posts suggest, Okun's famous law appears to be broken. Depending on the definition you trust, Okun's Law claims that every 1% increase above the natural unemployment rate is the result of a reduction in the GDP of 2-4%. The recent independence attributed to the unemployment rate despite growth in the GDP has led some to speculate that the law is obselete. But the fact that the GDP can be measured as spending or income raises the question over which is more accurate. The graphs in the article suggest the income approach to be more accurate and Okun's Law to still be relevant.