ECON 295 Chapter Notes - Chapter 31: Unemployment Benefits, New Keynesian Economics, Nairu
5 Dec 2017
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31. 1 employment and unemployment ( s) changes in employment: the long-run: S in employment roughly match s in the labor force: the short-run: The labor force is more stable ( s) changes in unemployment: unemployment usually s (falls) during booms & s (rises) during slowdowns : Sr fluctuations: over longer periods, unemployment s more due to structural s in the labor force. Flows in the labor market: lvl of activity in labor market may be better shown by flows into & out of unemployment. Roughly 400,000 workers flow in both directions each month! Measurement problems: official data understate the full effects of recessions on unemployment b/c they don"t include: Consequences of unemployment: 2 important costs associated with unemployment are, lost output & income, personal costs. 31. 2 unemployment fluctuations: cyclical unemployment: difference b/w actual employment & amt that would exist when y = y, when y = y*, there is still some unemployment:
