# Tag Info

## Hot answers tagged natural-rate-unemployment

Accepted

### Has the natural rate of unemployment decreased with modern travel and the Internet?

To me, it seems that it has increased, not decreased, due to the factors you mention. Yes, transportation and information networks enable workforce movement. But they also enable movement of goods and ...
• 244

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

Full employment is a more general term, which has much less implication than natural rate of employment. My experience reading a lot of economics papers is that careful authors do not mix the two ...
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### Right definition of natural rate of unemployment?

One definition of the natural rate of unemployment is the NAIRU: non-accelerating-inflation rate of unemployment. The classic story of the money illusion and unemployment works like this: Both ...
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### Separation rate & job finding rate

Separation = #new redundancies/employed person Job finding = #people entering employment/unemployed person
• 31

### Calculating natural rate of unemployment

The model you fit is simply inadequate to estimate the natural rate of unemployment any results from it will be completely unreliable, so I am not surprised if they make no sense. Furthermore, natural ...
• 43.5k

### Separation rate & job finding rate

Job separation rate = newly unemployed in period $t$ as share of employed in period $t-1$. Job finding rate = newly employed in period $t$ as a share of unemployed in period $t-1$. There are sometimes ...
• 1,170

### Has the natural rate of unemployment decreased with modern travel and the Internet?

I expect that in the UK it has increased due to the benefit system, we now have lots of unemployment in some parts of the north, but little movement of unskilled labour. However when the mills were ...
• 329

### Has the natural rate of unemployment decreased with modern travel and the Internet?

This was supposed to be a comment to @rumtscho, but it turns out to be too long, and then I kept adding information, so perhaps this deserves to be its own answer Is an increase in mobility really ...
• 10.4k
1 vote
Accepted

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

Actually both New Keynesians, Keynesians and Monetarists are advocating for short-run government activism, just the underlying mechanisms are different and Monetarists stress monetary over fiscal ...
• 43.5k
1 vote

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

The phrase “natural rate of unemployment” has been largely replaced by NAIRU or similar concepts. Each country has its own definition of the unemployment rate, the U.S. “headline” measure is U-3. ...
• 9,736
1 vote

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

What determines interest rates? Let's try to understand the emergence of interest rates from first principles. We'll imagine an island inhabited only by Robinson Crusoe and Friday. For sustenance, ...
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1 vote

### Why is sovereign rate a reference?

Sovereign rates in developed countries represent the credit risk-free curve. What maturity on the curve you want to choose is an analytical choice. The natural rate is in reference to a risk-free ...
• 9,736
1 vote
Accepted

### Am I correct that cyclical unemployment can be negative?

Cyclical unemployment $U^C$ is by definition difference between actual observed rate of employment $U$ and the natural rate of employment $U^N$ so we have: $U^C_t \equiv U_t-U_t^N$, see for example ...
• 43.5k
1 vote
Accepted

### How exactly does removing labor​ market rigidities reduce structural unemployment and increase potential output in an economy?

Potential benefits of labor market reforms such as a reduction in job security and trade union power: To find the answer to a reduction in job security, just apply it to your personal life(assuming ...
1 vote
Accepted

### Right definition of natural rate of unemployment?

Mankiw's definition alludes to a situation where the only source of unemployment is frictions and imperfections in the labor/human capital market (you could also add inherent rigidities like "...
• 31.9k
1 vote

### Right definition of natural rate of unemployment?

In the Blanchard book itself, when discussing the WS-PS model there is also a definition similar to that given in Mankiw. Relating to the first definition you gave, in the long run expectations adapt ...
• 380

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