The rise and downward trend of the natural rate

Article Abstract:

A study of the movement of the American unemployment rate reveals a positive and moderately significant coefficient for the growth rate of the labor force. Labor force slowdown in the 1970s and early 1980s is attributed to a force that acted to change the downward trend of the natural unemployment rate. Expected-productivity-growth and real-interest hypotheses reveal beneficial information. The coefficient of the real rate interest is significant and has the right sign but the rise in the natural rate is attributed to a more sluggish growth since the mid-1970s.

Unemployment, Labor Force, Labor supply

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Macroeconomic shocks in a dynamized model of the natural rate of unemployment

Article Abstract:

Steven Salop's model of the natural rate of unemployment is modified by creating an intertemporal framework. The new model shows that the real interest rate plays a key role in unemployment. Unemployment increases when exogenous aggregate demand shocks lead to high real interest rates. However, a temporary improvement in productivity causes unemployment rates to rise temporarily and short-term real interest rates to decline.

Models, Economic aspects, Interest rates, Macroeconomics, Equilibrium (Economics)

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The structuralist theory of unemployment

Article Abstract:

Various theories and economic models have been developed to explain the nature of employment and unemployment. The relationship between wage stickiness, economic shock and real interest rates were presented as an explanation for Europe's unemployment rate levels in 1981. Modifications and new theories have integrated other market variables such as an incentive-wage theory of the natural rate and general equilibrium linkages.

Employment, Wages, Wages and salaries

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