-
labor force
sum of employed and unemployed workers
-
unemployment rate
percentage of labor force that is employed
(#unemployed/labor force) x 100
-
discourage workers
ppl available for work but haven't looked for a job during the previous four weeks because they believe no jobs are available for them
-
not in the labor force
- ppl who dont have a job and who aren't actively looking for a job
- (retirees, homemakers, full time students, military service, prison, mental hospitals)
-
labor force participation rate
- percentage of the working age population in the labor force
- (labor force/working age population) x 100
-
frictional unemployment
short term unemployment that arises from the process of matching workers with jobs
-
structural unemployment
unemployment rising from a persistant mismatch between sills and attributes of workers
-
cyclical unemployment
caused by a business cycle recession
-
CPI
- avg of prices of the g&s purchased by a typical family of four
- (expenditures in current year/ exp. in base year) x 100
-
menu costs
costs to firms of changing prices
-
an important contributor to the relatively rapid growth of the US economy was the presence of
high flexibility of the US labor market
-
this is a problem because there appears to be another expectation of the the role of US households these are likely to lead to a
recession
-
a highly flexible labor market means that many workers
do not have job security, expect to be laid off with short notice
-
under the reagan administration & in the 2000s there was a
surge in borrowing (mostly from foreigners), federal gvmt ran large budget deficits
-
percentage of national income for US
70%
-
percentage of national income tend be higher in
more developed countries
-
four expectations for households
- 1. able to switch jobs without difficult
- 2. increasingly acquire assets
- 3. save enough to avoid temp job loss
- 4. spend heavily to ensure demand to keep US economy growing
-
situation is made worse
- 1. health come with employment--unemployment=no healthcare
- 2. unemployment payments are short lived
-
during 2000s it was _________ that was largely ignored
3. need for savings
-
___________ is the most important structural issues facing developed economies
tension between the 4 incompatible expectations
-
reagan showed that deficits dont matter and it was inconceivable that
free markets could fail
-
switching to inflation, economists focus on
the costs of business having to mark up prices
-
when the inflation is higher, it is
much harder to keep track of which goods are relatively cheap
-
hammer and nail problem seems to have implications
- 1. impacting our coverage of social problems
- 2. impacting our understanding of individual behavior&choices
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