Natural Rate of Unemployment Full Employment is not
![Natural Rate of Unemployment Full Employment is not zero Natural Rate of Unemployment Full Employment is not zero](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-1.jpg)
![Cyclical Structural 4 -Types of Unemployment Seasonal Frictional Cyclical Structural 4 -Types of Unemployment Seasonal Frictional](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-2.jpg)
![Natural Rate of Unemployment • What: Unemployment that does not go away in long Natural Rate of Unemployment • What: Unemployment that does not go away in long](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-3.jpg)
![Calculating the Natural Rate • Economists debate actual level – Was considered to be Calculating the Natural Rate • Economists debate actual level – Was considered to be](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-4.jpg)
![Unemployment Rate vs. Natural Rate When is the economy clearly strong below? Percent of Unemployment Rate vs. Natural Rate When is the economy clearly strong below? Percent of](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-5.jpg)
![2 -Types of Inflation • Demand-Pull Inflation: – Too many dollars chasing too few 2 -Types of Inflation • Demand-Pull Inflation: – Too many dollars chasing too few](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-6.jpg)
![Low Unemployment & Inflation As unemployment rate falls Below full employment Business competes for Low Unemployment & Inflation As unemployment rate falls Below full employment Business competes for](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-7.jpg)
![Labor Force Participation: Men versus Women Labor-Force Participation Rate (in percent) 100 80 Men Labor Force Participation: Men versus Women Labor-Force Participation Rate (in percent) 100 80 Men](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-8.jpg)
![Labor-Market Participation Labor-Market Participation](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-9.jpg)
![Economic History 1970 -2007 • Analyze GDP, Unemployment & CPI data Economic History 1970 -2007 • Analyze GDP, Unemployment & CPI data](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-10.jpg)
- Slides: 10
![Natural Rate of Unemployment Full Employment is not zero Natural Rate of Unemployment Full Employment is not zero](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-1.jpg)
Natural Rate of Unemployment Full Employment is not zero
![Cyclical Structural 4 Types of Unemployment Seasonal Frictional Cyclical Structural 4 -Types of Unemployment Seasonal Frictional](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-2.jpg)
Cyclical Structural 4 -Types of Unemployment Seasonal Frictional
![Natural Rate of Unemployment What Unemployment that does not go away in long Natural Rate of Unemployment • What: Unemployment that does not go away in long](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-3.jpg)
Natural Rate of Unemployment • What: Unemployment that does not go away in long run – Also called “Full Employment” (know this!) – Rate without cyclical unemployment – Also, total of frictional & structural (seasonal is adjusted out)
![Calculating the Natural Rate Economists debate actual level Was considered to be Calculating the Natural Rate • Economists debate actual level – Was considered to be](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-4.jpg)
Calculating the Natural Rate • Economists debate actual level – Was considered to be 5 -6% before the 1990’s – 2006 considered 4 -5% We will use 5% for Natural rate (Full Employment) Critical Thinking: Why is it lower today? Many Reasons: • • • Improved Job. Info on internet Temporary Work Agencies New Welfare Laws
![Unemployment Rate vs Natural Rate When is the economy clearly strong below Percent of Unemployment Rate vs. Natural Rate When is the economy clearly strong below? Percent of](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-5.jpg)
Unemployment Rate vs. Natural Rate When is the economy clearly strong below? Percent of Labor Force 10 Unemployment rate 8 6 Natural rate of unemployment 4 If unemployment rate is less than Full Employment, things are good! 2 0 1965 1970 1975 1980 1985 BUT!---inflationary pressures rise 1990 1995 2000 2005
![2 Types of Inflation DemandPull Inflation Too many dollars chasing too few 2 -Types of Inflation • Demand-Pull Inflation: – Too many dollars chasing too few](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-6.jpg)
2 -Types of Inflation • Demand-Pull Inflation: – Too many dollars chasing too few goods – Spending increases faster than production – Demand Side Inflation • Cost-Push Inflation – Increase in cost of any factors of production (input prices) – examples: price of oil, labor, steel, etc…. ) – Supply Side Inflation
![Low Unemployment Inflation As unemployment rate falls Below full employment Business competes for Low Unemployment & Inflation As unemployment rate falls Below full employment Business competes for](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-7.jpg)
Low Unemployment & Inflation As unemployment rate falls Below full employment Business competes for workers Wages begin to increase => The cost of doing business rises Leads to “cost push” inflation
![Labor Force Participation Men versus Women LaborForce Participation Rate in percent 100 80 Men Labor Force Participation: Men versus Women Labor-Force Participation Rate (in percent) 100 80 Men](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-8.jpg)
Labor Force Participation: Men versus Women Labor-Force Participation Rate (in percent) 100 80 Men 60 40 Women 20 0 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
![LaborMarket Participation Labor-Market Participation](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-9.jpg)
Labor-Market Participation
![Economic History 1970 2007 Analyze GDP Unemployment CPI data Economic History 1970 -2007 • Analyze GDP, Unemployment & CPI data](https://slidetodoc.com/presentation_image_h/9966e0672d017ba448f14899959aa473/image-10.jpg)
Economic History 1970 -2007 • Analyze GDP, Unemployment & CPI data