Okun’s law and anelastic relaxation in advanced and developing economies

We show that the anelastic form of Okun’s law describes the output-unemployment relationship in a large number of advanced and developing counties well, and find two novel forms of this relationship: a Voigt-form of Okun’s law as well as a purely dynamical form of Okun’s law with no long-term output-unemployment tradeoff. We also find that the time-dependence in the anelastic form of Okun’s law reconciles the conflicting observations of general linearity and occasional nonlinearity by generalizing the output-unemployment relationship from a simple line to an ellipse known as an Okun loop.