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Tutor2u - Unemployment - Natural Rate of Unemployment (514 words) |
 | The natural rate of unemployment is the equilibrium rate of unemployment. |
| Thus the natural rate of unemployment = AB and consists of frictional + structural unemployment |
| The government might cut the natural rate of unemployment by reducing the horizontal distance between the supply of labour curve and the labour force curve. |
| Natural rate of unemployment in US (2581 words) |
| His 1968 theory of the so-called "natural rate of unemployment" was subsequently developed by many mainstream economists under the term "Non-Accelerating Inflation Rate of Unemployment," or NAIRU, a remarkably clumsy term for expressing the simple concept of a threshold unemployment rate below which inflation begins to rise. |
| In other words, according to Friedman, what he terms ~ the "natural rate" is really a social phenomenon measuring the class strength of working people, as indicated by their ability to organize effective unions and establish a livable minimum wage. |
| In short, class conflict is the specter haunting the analysis of the natural rate and NAIRU: this is the consistent message stretching from Milton Friedman in the 1960s to Robert Gordon in the 1990s. |
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