ECON 204 Lecture Notes - Lecture 7: High School Dropouts, Business Cycle, Human Capital
Document Summary
If they are not actively seeking a job for the whole month (four weeks) they do not count: not in the labor force is what they are categorized as. The costs of unemployment: duration, unemployment is a serious social problem, economic stress, drug & alcohol abuse, divorce & domestic violence, suicide, unemployment also creates economic costs, lost output, human capital deterioration, harm to future job prospects. Families have to cut back on things i. ii. The midpoint of the range of going up and down is about 5% After world war 2 was less severe: more stable pattern a. b. Keeps economy from collapsing way down and from shooting way up. Used to get rid of inflation and succeeded. Contraction of monetary policy: worked over the long run in 1981-1982 ii. iii. iv. Extremely financial speculation and brought down almost the whole financial system. Unemployment was high in 2010 but slowly falling since then.
