Albers, Scott and Albers, Andrew L.
(2013):
*Does “Okun’s Law” state a Pi:1 ratio? Toward a harmonic interpretation of why Okun’s Law works.*

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## Abstract

In Albers & Albers (Spring, 2013) we demonstrated that the historic development of U.S. real GNP, 1869-present, may be structured in recurring 14-year periods. A steady-state rate of growth of 3.4969% is thereby calculated, generating an increase in real GNP proportional to the famous “Golden Mean” (1:phi or 1:1.6180) every fourteen years on average. Building on this foundation we show herein that “Okun’s Law,” a 3:1 proportion between percent growth in real GNP and percent decrease in the rate of unemployment, is actually a pi:1 proportion, created through a form of mathematic / harmonic inverse. The resulting model of economics in the United States is thereby aligned with geometric, harmonic and trigonometric analysis, rather than purely statistical methods.

Item Type: | MPRA Paper |
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Original Title: | Does “Okun’s Law” state a Pi:1 ratio? Toward a harmonic interpretation of why Okun’s Law works |

English Title: | Does “Okun’s Law” state a Pi:1 ratio? Toward a harmonic interpretation of why Okun’s Law works |

Language: | English |

Keywords: | Pi, Phi, Golden Mean, Okun's Law, United States economic history, GNP Spiral, Kondratiev Wave, Long Wave, trigonometric analysis |

Subjects: | A - General Economics and Teaching > A1 - General Economics > A10 - General A - General Economics and Teaching > A1 - General Economics > A12 - Relation of Economics to Other Disciplines A - General Economics and Teaching > A1 - General Economics > A13 - Relation of Economics to Social Values B - History of Economic Thought, Methodology, and Heterodox Approaches > B0 - General B - History of Economic Thought, Methodology, and Heterodox Approaches > B0 - General > B00 - General B - History of Economic Thought, Methodology, and Heterodox Approaches > B4 - Economic Methodology B - History of Economic Thought, Methodology, and Heterodox Approaches > B4 - Economic Methodology > B40 - General B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B50 - General B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B59 - Other C - Mathematical and Quantitative Methods > C0 - General C - Mathematical and Quantitative Methods > C0 - General > C00 - General C - Mathematical and Quantitative Methods > C0 - General > C01 - Econometrics C - Mathematical and Quantitative Methods > C0 - General > C02 - Mathematical Methods C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C19 - Other C - Mathematical and Quantitative Methods > C5 - Econometric Modeling C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C50 - General C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and Estimation C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C53 - Forecasting and Prediction Methods ; Simulation Methods D - Microeconomics > D0 - General D - Microeconomics > D0 - General > D01 - Microeconomic Behavior: Underlying Principles D - Microeconomics > D0 - General > D03 - Behavioral Microeconomics: Underlying Principles E - Macroeconomics and Monetary Economics > E0 - General E - Macroeconomics and Monetary Economics > E0 - General > E00 - General E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E10 - General E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E13 - Neoclassical E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E19 - Other E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles P - Economic Systems > P1 - Capitalist Systems P - Economic Systems > P1 - Capitalist Systems > P10 - General P - Economic Systems > P1 - Capitalist Systems > P16 - Political Economy Z - Other Special Topics > Z0 - General Z - Other Special Topics > Z0 - General > Z00 - General |

Item ID: | 44843 |

Depositing User: | Scott Albers |

Date Deposited: | 08 Mar 2013 04:32 |

Last Modified: | 27 Sep 2019 13:01 |

References: | Albers, S. and Andrew Albers, (2011). ‘The Golden Mean, The Arab Spring and a 10-Step Analysis of American Economic History,’ The Middle East Studies Online Journal, August 2011, issue 6, volume 3, pp. 199-253. Albers, S. and Andrew Albers, (2013). ‘On the Mathematic Prediction of Crises: Towards a Harmonic Interpretation of the Kondratiev Wave,’ Entelequia, Spring, 2013. Euclid of Alexandria, Elements. Goldstein, J. (1988). Long Cycles: Prosperity and War in the Modern Age, Yale University Press, New Haven, Conn. Hemenway, P. (2005). Divine Proportion, Phi In Art, Nature and Science, Sterling Publishing Company, New York, NY 10016. Knotek, E. (2007). ‘How Useful Is Okun’s Law?’ Economic Review, Kansas City Federal Reserve, Issue Q IV, pp. 73-103. Kondratiev, N. D., The Major Economic Cycles (in Russian), Moscow, 1925; translated and published as The Long Wave Cycle by Richardson & Snyder, New York, 1984. Korotayev, A. V. and Sergey V. Tsirel, (2010). ‘A Spectral Analysis of World GDP Dynamics: Kondratieff Waves, Kuznets Swings, Juglar and Kitchin Cycles in Global Economic Development, and the 2008–2009 Economic Crisis,’ Journal of Structure and Dynamics, Social Dynamics and Complexity, Institute for Mathematical Behavioral Sciences, University of California at Irvine. Livio, M. (2002). The Golden Ratio: The Story of the World’s Most Astonishing Number, Broadway Books, New York. Okun, A. (1962). Potential GNP: Its Measurement and Significance. Paper 190, Cowles Foundation, Yale University. Owyang, M and T. Sekhposyan, ‘Okun’s Law over the Business Cycle, Was the Great Recession All That Different?’ Federal Reserve Bank of St. Louis Review, September / October, p. 399, 2012) Rucker, R. (1983). Infinity And The Mind, The Science And Philosophy Of The Infinite, Bantam Books, December 1983;84-88. Schumpeter, J. A. (1939). Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process, New York and London: McGraw-Hill Book Company, Inc. Sethares, W. A. (1992). “Relating Tuning and Timbre,” Experimental Musical Instruments, September 1992. Skinner, S. (2006). Sacred Geometry, Sterling Publishing, New York, NY. 10016. Tobin, J. (1983). “Okun, Arthur M.” The New Palgrave Dictionary of Economics, Vol. 3, pp. 700-701, Macmillan, London. Historical Statistics of the United States: Colonial Times to 1970, Part 1, United States Department of Commerce, Series F 1-5, "Gross National Product" for the United States between the years 1869-1970 according to 1958 prices. See also the figures for Real GNP, 1947 to present, maintained by the St. Louis Federal Reserve at http://research.stlouisfed.org/fred2/series/GNPC96. |

URI: | https://mpra.ub.uni-muenchen.de/id/eprint/44843 |