Macro - class 4 - Sept 24 class 4 macro Unemployment rate...

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Unemployment rate (UR): how close an economy is producing relative to its capacity. Labour force survey: YR is estimated from house hold surveys UR - booms / recessions Classified as unemployed: a) wanted a job b) looked for a job c) but could not find an acceptable job Individuals are classified in 4 groups: 1. those employed in some job 2. those who were in the labour force 3. those who wanted a job immediately, but had not been looking because they thought they could not find one. discouraged workers 4. Those who wanted a job immediately, had been looking but had not found an acceptable job. 1=employed 4=unemployed 1+4= Labor force UR= unemployed/labor force = 4/ (1+4) 1. Being underemployed still counts as employed, for instance if they work for 5 hours a week. Okun’s Law: Says that there is an inverse relationship between the growth rate of real GDP and changes in the unemployment rate. g = a –b delta(UR)
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Macro - class 4 - Sept 24 class 4 macro Unemployment rate...

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