Questions tagged [natural-rate-unemployment]

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How does using HP filter allows us to estimate long-run values for variables such as output and unemployement?

I'm reading the paper "Okun's Law: Fit at 50?" written by Laurence Ball, Daniel Leigh and Prakash Loungani. In it, in order to estimate Okun's Law in its level form, they use the HP filter ...
34 views

What measure of unemployment is used by central banks to find out whether the rate of unemployment is below the natural rate of unemployment?

Having an unemployment rate below the natural rate of unemployment (NRU) leads to wage inflation and a reduction in productivity. Seeing the consequences of that, and knowing that one of the roles of ...
90 views

Calculating natural rate of unemployment

I have sample data on unemployment rate in a market and am looking to calculate the natural unemployment rate. The natural unemployment rate I obtained is constant over a time period, which is not a ...
49 views

Why Keynesians prefer short run measures despite straight long-run Phillips curve?

I was studying about the Monetarists' and Keynesians' view of the Phillips curve and natural rate theory of Friedman. It seems intuitive to me as to why Friedman argues that using an expansionary ...
19 views

Explaining negative “cyclic” unemployment with a production function

First of all, here is a related post. Unfortunately, it does not answer my question. I have heard that there is an understanding of negative unemployment in economic theory. Obviously, absolute ...
31 views

What are the determinants of the natural rate of interest and how market rate converges to it?

I'd like to know how is determined the natural/neutral rate of interest. Moreover, how the market rate can converge to it ? If you have some references it would be great !
32 views

Why is sovereign rate a reference?

I would like to know why we always focus on 10 years sovereign rates when we talk about interest rates ? Let me clarify. I'm reading a paper from the Bank of England that emphasizes the fact that ...
334 views

Am I correct that cyclical unemployment can be negative?

Let's start with stating and emphasizing some truths that we will need later. Overall unemployment rate=Frictional unemployment + Structural unemployment + Cyclical unemployment. Also, Natural rate of ...
54 views

Why would overemployment mean that labor is used inefficiently?

If labor is being used efficiently, there is no excess unemployment or over employment. This phrase from Khan Academy struck me as quite strange. Why on Earth would over employment mean that labor ...
27 views

How exactly does removing laborā market rigidities reduce structural unemployment and increase potential output in an economy?

Here I want to focus primarily on the potential benefits of labor market reforms such as a reduction in job security and trade union power and not their controversies. I wish to learn a few thoroughly ...
73 views

question regarding econometric testing of the natural rate hypothesis

Hi All: I have the Lucas, 1972b paper "Econometric Testing Of the Natural Rate Hypothesis" but unfortunately not as a pdf. ( it's from a book that contains a lot of Lucas' papers called "studies in ...
41 views

Why is Canada's unemployment rate higher than that of the US, UK, Germany and the Netherlands?

Current unemployment rate in Canada is about 5.8% while countries such as the US, UK, Germany and the Netherlands have unemployment rates well below 5%. In addition, the current unemployment rate in ...
93 views

Why does a reduction in regional differences in unemployment shift the Phillips curve?

According to this question below, apparently a reduction in the regional differences in the level of unemployment would shift the short run Phillips curve SRPC leftwards. The answer to the question is ...
124 views

AS-AD model and labor force increase and natural rate of unemployment

I am trying to analyze the effects on the unemployment rate $u$ as the labor force $L$ increases, by use of the AS-AD model. I have however some issues I can't wrap my head around: If we increase ...
47 views

How to distinguish Full-time (FT) employment and Part-time (PT) employment when calculating employment rate?

Which of the following is true for the Canadian labour force data for June, 2015, for unemployment, Full-time (FT) employment, and Part-time (PT) employment? A) Unemployment fell because FT ...
6k views

Is 'full employment' synonymous with 'the natural rate of unemployment'?

Is the phrase 'full employment' synonymous with the phrase 'the natural rate of unemployment'? Parkin, et al. (2010) seem to use these two terms interchangably in chapter 20, but looking up these two ...