ECON 3620 Lecture Notes - Lecture 7: Unemployment Benefits, Marginal Cost, Moral Hazard
18 Sep 2015
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Problem: representing something isn"t working well in the economy. The deficient demand of unemployment: 2006- 11 in us. The first three types are healthy unemployment. New jobs created and old jobs eliminated. Full employment or potential employment, 4-6% of natural rate of unemployment. Caused by people entering and leaving labour force: whatever affecting by age, etc New jobs: creating short term employment. 2 types of job search: employer. Looks for people to fill position: employee. Don"t know about certain companies whos looking for employees. Change in technology or international competition, leading to the change in skills for the job: farmer -> industrial -> manufacturing -> electrical/mechanical -> information technology. Seasonally adjusted: assumes in the months they didn"t have a job, what would be the unemployment rate, finding reasons to why unemployment. Seasonally unadjusted: how many employed, how many unemployed per month. Difference is actual unemployment natural rate of unemployment.
