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Questions tagged [unemployment]

Unemployment is the condition of one who is capable of working, actively seeking work, but unable to find any work.

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15 views

Would households rather live in a world with or without the unemployment insurance?

Would households rather live in a world with or without the unemployment insurance? What is a good example of world in which unemployment insurance is seen as a benefit, and not a hindrance?
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Are there any net benefits in reducing/increasing tourist-oriented retail business?

Hong Kong is currently experiencing a slump in foreign tourist-oriented retail sales. Shops selling jewellery, watches, infant formula or Chinese medicine experienced a 25-35% decline YoY in August. ...
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23 views

Economic Achilles' heels of global financial economy

The latest attacks on oil production in Saudi-Arabia highlights the need for risk managers to follow up on possible terrorist targets that can have a global impact on the global financial economy, ...
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1answer
42 views

Limitation of Unemployment rate

What is the rationale behind government not including discouraged workers who have given up looking for jobs out of frustration given the state of economy? This under-reports the job market and at ...
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1answer
30 views

Define structural unemployment

I am a bit confused regarding the actual definition of structural unemployment. Some places say that it is the permanent decline of a particular industry, leading to workers being unemployed as they ...
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19 views

Why people set expectations for economic data beforehand?

For lots of economy/finance-related data, usually there is an expectation, and then people will compare the real data (when coming out) with the expectation, to see if it beats or misses the ...
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1answer
25 views

Has there been an applications of search and matching theory in the Neoclassical Growth Model?

Specifically, I am looking for the standard neoclassical growth model, but the labour decision is based on either search or matching theory instead of a Walrasian labour mechanism.
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1answer
49 views

What is low unemployment and low gdp growth symptomatic of?

Obviously there are caveats with GDP, if you build a bridge to nowhere it counts as GDP, but if you mow your own lawn or volunteer to pick up garbage it doesn't count, and so forth and so on. However, ...
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43 views

Does migration exacerbate (albeit delay) the problem of aging, economically-inactive populations in Western societies?

As a layman, I've always understood that there is a general consensus amongst economists that "immigration is economically beneficial" to rich Western countries (like Britain) who have aging ...
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55 views

In April 2019 our economy created 263000 new jobs, however, total employment went down from March to April by103000 jobs. Why this difference?

https://tradingeconomics.com/united-states/employed-persons This link shows that total employment declined from March to April even though we added 263000 new jobs. Can someone explain why?
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52 views

Search and matching model: effect of hiring cost on wage curve

What effect does the hiring cost have on the wage bargaining outcome (wage curve)? In Cahuc, Carcillo, and Zylberberg: Labor Economics, they derive the following wage curve: $$w = z + (y-z) \frac{\...
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Have any economics papers used unified cure models?

Does anyone know if there are unified cure models (aka split population models) in time-until-employment studies that combine the mixture cure approach with the promotion time approach as described in ...
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33 views

What are some common causes of jobless growth?

While "jobless recovery" is often discussed in the aftermath of recessions in Western countries, it seems it's always a short-lived phenomenon. On the other hand, it looks like in other parts of the ...
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340 views

Why are the Fed's goals often described as the “dual mandate” and not the “triple mandate”?

The Federal Reserve Act Section 2A states: The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit ...
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1answer
131 views

Average employment length

From Macroeconomics 7th edition by Gregory Mankiw, p166. Here’s a numerical example. Suppose that 1 percent of the employed lose their jobs each month ($s$ = 0.01). This means that on average jobs ...
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2answers
32 views

Technological unemployment

I am doing a project on technological change in the job market, that is the substitution of routine occupations and increasing demand for high-skilled jobs. I have done some research on this and now I ...
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14 views

Positive Phillips Curve

I am doing some research for a class project for Phillips curve of countries. For a certain country that I am doing, I am getting a slope for the Phillips curve to be positive. Is this possible? ...
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2answers
69 views

If someone stays at home because they can't find the type of job they want, are they included in unemployment numbers?

Say someone is looking for a job, but the ones they can find either don't give them the right compensation (businesses pay them too low) or is not the type of work they're looking for. So they stay at ...
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211 views

How is there full employment level at equilibrium level according to Keynesian theory(AD-AS approach)?

According to Keynesian theory :- Equilibrium level is the point at which Aggregate Demand curve intersects Aggregate Supply curve . And this point is termed as Full Employment Level How do we ...
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1answer
29 views

How is employment related to aggregate demand and aggregate supply?

When we talk about excess or deficient aggregate demand , how does employment suddenly comes ?
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3answers
56 views

Why do stricter emission limits cost jobs?

I live in Germany and as most people know the car industry is very important in our country. Currently, there is a discussion about stricter emission limits for cars in the European Union. The car ...
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5answers
179 views

Why do firms losing money almost always reduce labor costs via layoffs instead of pay cuts?

At least in the United States, firms seem to almost always reduce labor costs via layoffs rather than pay cuts. Pay cuts are so rare that they're literally headline news. From an economic standpoint, ...
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2answers
70 views

Is Debt Monetization Equivalent to transferring money from rich to poor?

I'm reading Ray Dalio's "How the Economic Machine Works", and he says that there are four factors contributing to deleveragings in economies: 1) Debt Reduction 2) Austerity 3) Transferring wealth ...
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3answers
170 views

Does immigration help to sustain welfare in rich European countries?

There is a lot of discussions about immigration and its effect on economies lately in Europe, so I'd like to ask a question. Is it true that immigration helps to sustain welfare in rich European ...
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1answer
24 views

US unemployment data release date

Using the CSV file provided by St. Louis Fed (which is based on the data series LNS14000000 from the Bureau of Labor Statistics) I noticed that the date is always the first day of each month for the ...
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1answer
97 views

Labour Market: simple macroeconomic modeling

I just started reviewing macroeconomic modeling for an upcoming entry exam, and I'm not sure about my answers in this application: Suppose that the economy of a country has a representative firm ...
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1answer
151 views

Expectation augmented Phillips Curve

Currently studying Intro to Macroeconomics, and faced Expectations augmented PC. In my textbook it is not clear how expected inflation affects unemployment. My view so far, is that expected inflation ...
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33 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 ...
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1answer
221 views

The Shapiro-Stiglitz model. Why under full employment do unemployed workers find jobs instantly?

Under the Shapiro-Stiglitz model the No-Shirking Condition is: $$w=\bar{e}+\left( \rho +\frac{\bar{L}}{\bar{L}-NL}b \right)\frac{\bar{e}}{q}$$ Where: $\bar{e}=$ exerted effort by employees $\rho=$ ...
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2answers
89 views

A confusion regarding search and matching model in Pissarides's “Equilibrium Unemployment Theory” book

I was studying chapter 1 of the book "Equilibrium Unemployment Theory" and I got confused about the way Pissarides has defined the probability of a firm not finding a worker in a short time interval $...
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1answer
202 views

Unemployment. What is the source of income?

In USA, more than 1 in 5 persons in working age are unemployed (that includes people looking for jobs, and also the ones not looking for jobs, so is not just the officially unemployed population). ...
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1answer
113 views

Can Okun's Law be used for forecasting?

Can one forecast $\Delta Unemployment$ and $\Delta Inflation$ using a VAR model based on Okun's law?
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2answers
65 views

Relation $\Delta Unemployment$ and $\Delta GDPgrowth$

I have studied the development of the difference in unemployment and the difference in the growth of real GDP in the Netherlands over the years 1963-2016. From the picture it seems like a change in ...
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0answers
54 views

Estimating Job Vacancy rate empirically

I'm currently reading up on matching models in terms of their ability to describe frictional unemployment, they generally follow a cobb-douglas form. $$M(u,v)=m=\mu u^\alpha v^{1-\alpha}$$ Where $M(...
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1answer
194 views

Okun's law nominal GDP growth

Does Okun's law also work for nominal (not real) GDP growth?
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2answers
732 views

Difference between frictional unemployment and seasonal unemployment

Julie spent the entire summer of 2007 working for a tree planting company in Central British Columbia. At the end of July, her contract ended because of weather conditions. She spent the month of ...
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1answer
108 views

What does it mean when the natural rate of unemployment is greater than the actual rate?

According to this graph: I just don't get when natural unemployment is greater than actual unemployment. Why is this the case?
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1answer
386 views

Testing the long run phillips curve / Contradicting empirical results?

I've been working with some historical macroeconomic data of the Canadian economy and am having difficulty empirically testing the Phillips curve long run and short run versions. I got the data from ...
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1answer
640 views

1929 stock market crash and unemployment rate

Thomas Sowell has repeatedly made the case that government intervention is largely responsible for the Great Depression. For example, he notes what happened with the unemployment rate in the months ...
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2answers
76 views

Why is it not possible to prevent sudden unemployment of thousands of people?

Why is it not possible to prevent sudden unemployment of thousands of people? Often one can observe, for example in news, that suddenly from one day to the other thousands of people of a company get ...
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2answers
229 views

What is the logic behind this sentence in Keynes's General Theory?

It seems hard for me to understand the underlying logic of this sentence in Chapter 2 of this book: They do not seem to have realised that, unless the supply of labour is a function of real wages ...
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85 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 ...
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2answers
47 views

How is workforce guaranteed in basic income system?

After reading an article on wiki and watching the Ted video on basic income system in a society and even M.Zuckerberg talks about it, nobody really addresses the issue of the workforce availability. ...
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1answer
235 views

Basic question on calculating unemployment rates

I would like to know if I have interpreted the following statement correctly and would be grateful of any help at all. "The unemployment rate for 16-24 year olds not in full-time education was 12.2%...
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1answer
143 views

How do I verify Philips curve empirically for recent years?

I wanted to verify the relationship between inflation and unemployment empirically, so I took data from the World Bank and used excel to correlate them. I got a very, very bad correlation between ...
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2answers
103 views

Minimum Wage effects on Adjacent Cities

When a city like Seattle raises the minimum wage to 15/hr, how does it affect the labor market in adjacent cities? Are there examples, studies or accepted practices to address: Difficulty staffing ...
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34 views

How much does one percent of unemployment 'cost'? (Unemployment elasticity)

There is always debate that increasing minimum salary will pour in more money into the budget as those who get minimum salary will spend them immediately. The counter argument is that increasing ...
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0answers
42 views

Understanding the complex relationship between macro and micro economic factor: Job shift

As the world knows plenty of manufacturing jobs shifted from various countries to China. This macroeconomic trend of consolidating manufacturing jobs in China has been going on for past 30 years. ...
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1answer
53 views

Why does the Federal Reserve seem to hold so much weight on the unemployment rate, relative to labor participation?

The title is the question. In the press conference held yesterday, the Chair referenced "unemployment" 18 times, relative to "participation" 3 times. If the labor participation is at the lowest ...
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1answer
143 views

In what way is the labor participation rate useful for tracking unemployment?

I'm trying to do some research on unemployment and labor participation rate in the US to figure out what people are talking about. For instance, the Civilian Labor Force Participation Rate for Sept ...