Okun’s Law as a Pi-to-1 ratio: A harmonic / trigonometric theory as to why Okun’s Law works

Albers, Scott (2013): Okun’s Law as a Pi-to-1 ratio: A harmonic / trigonometric theory as to why Okun’s Law works.

Abstract

“Okun’s Law” states a 3:1 proportion between percent growth in U. S. real GNP and percent decrease in the rate of unemployment. This paper argues that this ratio is actually a Pi:1 proportion, heretofore unrecognized because it is displayed through a form of mathematic / harmonic inverse. In Part One the Cartesian coordinate system is merged with the legal doctrines of actus reus (x-axis, actions) and mens rea (y-axis, thoughts). A unit circle of personal choice – including economic choice (trading vs. keeping) – may thereby be devised. This unit circle is then aggregated into a torus, half the circumference of which represents U.S. real GNP (Pi), the antipodal half-circumference its monetary value (Pi) and the radius the rate of employment necessary to its production (R = 1). Mainstream econometric analysis appears to support this theory of inverses with proximities of within 1.3%, 1.0%, 0.35%, 0.00105% and less than half a degree. In Part Two this model of Okun’s Law is connected closely to an analysis of the well-known Kondratiev Wave, a 56-year “Long Wave” of evolving social and economic relationships. This approach to macroeconomics is thereby aligned with a geometric, harmonic and trigonometric analysis of empirical data, rather than purely statistical methods.

• Item Type: MPRA Paper
• Language: English
• Keywords: Okun’s Law, Kondratiev wave, unemployment, GNP growth, Long wave, trigonometric analysis, unit circle, Okun’s coefficient, steady-state rate of growth, pi, phi, the Golden Mean, harmonic analysis
• Subjects: 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 > 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 > B41 - Economic Methodology; B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches; B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B59 - Other; 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; 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 > E19 - Other; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles; P - Economic Systems > P1 - Capitalist Systems; P - Economic Systems > P1 - Capitalist Systems > P16 - Political Economy; Z - Other Special Topics > Z0 - General; Z - Other Special Topics > Z0 - General > Z00 - General

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