Lectures_Outline_Chpt2

Also some people may misreport their work status in

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Unformatted text preview: abor market: – excludes discouraged workers – does not distinguish between full-time and part-time work. – Also, some people may misreport their work status in the Current Population Survey (CPS). Total Population and Working Age Population Unemployment and Participation in the 2000’s Why do we care about unemployment ? • Negative effects on individuals • Inefficient use of resources • How low should unemployment be ? Short, Medium, Long - Run • Short – run (say a few years): demand factors, e.g. consumer confidence, lead to expansions and recessions. • Medium – run (say 10 years): in the medium run, output returns to a value determined by supply factors, like the level of technology, the level of capital, the size of the labor force. • Long – run (say 50 years): to understand the growth rate of output (thus of technology and capital) we look at education level, institutions, saving rate, etc. What can we learn in this class? • A theoretical framework to answer the following questions – What determines expansions/recessions ? (Part I: The Short - Run) – What is the relationship between inflation, output and unemployment ? (Part II: The Medium-Run) – What determines economic growth ? (Part III: The Long-Run) – What are the effects of different fiscal and monetary policies? 16...
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This note was uploaded on 02/06/2014 for the course ECON 110A taught by Professor Staff during the Spring '08 term at UCSD.

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