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17 Jul 2019
Suppose that on average, unemployed workers find jobs at the rate of 30% per period and employed workers loose jobs into unemployment at a rate of 2% per period. Assume the size of the labor force is forever fixed.
1. Beginning with an unemployment rate of 5% this period, what will be the unemployment rate next period.
2. What is the steady state unemployment rate?
Suppose that on average, unemployed workers find jobs at the rate of 30% per period and employed workers loose jobs into unemployment at a rate of 2% per period. Assume the size of the labor force is forever fixed.
1. Beginning with an unemployment rate of 5% this period, what will be the unemployment rate next period.
2. What is the steady state unemployment rate?
Casey DurganLv2
17 Jul 2019
