We have measured average labor productivity in this chapter as Y/N, where Y is real GDP and N is employment. The business cycle facts concerning employment relate to how the denominator N comoves with the numerator Y, and those concerning average labor productivity relate to how Y/N comoves with Y. Explain how the business cycle facts concerning employment and average labor productivity in Tables 3.1 and 3.2 are consistent.

Table 3.1 Correlation Coefficients and Variability of Percentage Deviations from Trend Correlation Coefficient (GDP) Std. Dev. (% of S.D. of GDP) Consumption 0.78 83% Investment 0.81 509 Employment 0.79 80 Average labour productivity 0.65 64Table 3.2 summary of Business Cycle Facts Cyclicality Lead/Lag Variability Relative to GDP Consumption Procyclical Coincident Smaller Investment Procyclical Coincident Larger Employment Procyclical Lagging Smaller Real wage rate Procyclical Average labour productivity Procyclical Coincident Smaller