Arthur Okun (1928–1980)
Who They Were
Arthur Okun (1928-1980) was an American economist who combined academic research with a prominent role in economic policy. He chaired the Council of Economic Advisers under President Johnson and later worked at the Brookings Institution, bridging the worlds of scholarship and government. Working mainly in the 1960s and 1970s, he focused on the relationship between the labour market and overall economic output, and on practical ways to measure economic hardship. He is counted among the people who built and refined the machinery of macroeconomic measurement, alongside figures such as Simon Kuznets and Wesley Mitchell. His name survives in two widely used concepts that connect unemployment, output and inflation, both of which remain staples of macroeconomic teaching.
Key Contributions
Okun is best known for Okun's law. In a 1962 paper on potential output and its measurement, he documented a stable empirical relationship in U.S. data between the change in the unemployment rate and the growth of output relative to its potential - describing the tendency for unemployment to rise when output growth falls short of its potential rate. Importantly, Okun's law is a fitted statistical regularity, not an accounting identity, and its estimated coefficient has drifted over the decades. He also created the Misery Index, which puts inflation and joblessness in a single number as the simple sum of the unemployment rate and the inflation rate. Together these tools link the labour market directly to output and inflation data, and both are widely taught in macroeconomics.
On EconRecall
American economist and Kennedy-Johnson adviser known for Okun's law and the Misery Index. Play the games that feature Arthur Okun: