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What is the minimum growth rate

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Reference no: EM131886006

Suppose based on the past twenty years of data the estimating equation for Okun's Law is ut - ut-1 = -0.4 (gt - g*), where g*, the normal (or benchmark) growth rate of output, is equal to 3%. If the current rate of unemployment is 9% what is the minimum growth rate of output needed over five years to reduce the unemployment rate to 5%?

Reference no: EM131886006

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