Labor Markets in the Global Financial Crisis: The Good, the Bad and the Ugly

2014-11 | April 1, 2014

This note examines labor market performance across countries through the lens of Okun’s Law. We find that after the 1970s but prior to the global financial crisis of the 2000s, the Okun’s Law relationship between output and unemployment became more homogenous across countries. These changes presumably reflected institutional and technological changes. But, at least in the short term, the global financial crisis undid much of this convergence, in part because the affected countries adopted different labor market policies in response to the global demand shock.

Article Citation

Nechio, Fernanda, John G. Fernald, Mary C. Daly, and Oscar Jorda. 2014. “Labor Markets in the Global Financial Crisis: The Good, the Bad and the Ugly,” Federal Reserve Bank of San Francisco Working Paper 2014-11. Available at https://doi.org/10.24148/wp2014-11

About the Authors
Mary C. Daly
Mary C. Daly is president and CEO of the Federal Reserve Bank of San Francisco. Learn more about Mary C. Daly
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John G. Fernald is a senior research advisor in the Economic Research Department of the Federal Reserve Bank of San Francisco, and a professor of economics at INSEAD. Learn more about John G. Fernald
Òscar Jordà
Òscar Jordà is a senior policy advisor in the Economic Research Department of the Federal Reserve Bank of San Francisco. Learn more about Òscar Jordà
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Fernanda Nechio is a vice president in the Economic Research Department of the Federal Reserve Bank of San Francisco. Learn more about Fernanda Nechio