Source oecdstat unemployment q12012 q32011 q12011

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Unformatted text preview: cCon we answer: Why there is unemployment in equilibrium? 30 25 Denmark 20 France Germany 15 Greece Japan Korea 10 Spain United Kingdom United States 5 0 Harmonized unemployment rates (%). Source: OECD.Stat Unemployment Q1 ­2012 Q3 ­2011 Q1 ­2011 Q3 ­2010 Q1 ­2010 Q3 ­2009 Q1 ­2009 Q3 ­2008 Q1 ­2008 Q3 ­2007 Q1 ­2007 Q3 ­2006 Q1 ­2006 Q3 ­2005 Q1 ­2005 Q3 ­2004 Q1 ­2004 Q3 ­2003 Q1 ­2003 Q3 ­2002 Q1 ­2002 Q3 ­2001 Q1 ­2001 Q3 ­2000 Q1 ­2000 Q3 ­1999 Q1 ­1999 25 23 21 19 17 15 13 11 9 7 Moving Average Harmonized unemployment rate (%) in Spain and eight period moving average. Source: OECD.Stat New Keynesian theories challenge this classical result on two grounds: 1.  Real wage rigidiCes may give rise to labour market equilibrium with involuntary unemployment. 2.  Nominal wage sCckiness may permit temporary displacements from equilibrium. Taxonomy of unemployment (1) Long ­run or structural unemployment. Caused by (long ­run) real wage rigidiCes: real rigidiCes prevent the real wage from moving down unCl the market clears. We discuss these features of labour...
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This note was uploaded on 03/11/2013 for the course ECON ES20013 taught by Professor Martin during the Spring '12 term at University of Bath.

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