Macroeconomics › Section H · Unemployment › Topic H.4
Long-run causes: the natural rate
Even in the best of times, some people are between jobs or lack the skills employers want. That baseline, the natural rate of unemployment, is never zero, and it is shaped by demographics, technology and public policy.
In this topic
- Why unemployment is never zero
- Frictional unemployment
- What sets frictional unemployment
- Structural unemployment
- Full employment and potential GDP
- Worked example: splitting unemployment by type
- Productivity surprises
- Public policy and the natural rate
- Worked example: is the economy at full employment?
- Matching policy to the cause
- Common mistakes to avoid
- Key takeaways
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