The story
Named after Arthur Melvin Okun, who proposed the relationship in 1962.
Etymology from Wiktionary, CC BY-SA 4.0.
Okun's law
Today it means: An empirically observed relationship between unemployment and losses in a country's production. The "gap version" states that for every 1% increase in the unemployment rate, a country's GDP will be roughly an additional 2% lower than its potential GDP. The "difference version" describes the relationship between quarterly changes in unemployment and quarterly changes in real GDP. Full definition →