Originally Posted By: Tempest
Quote:
an "optimum" level of unemployment
You have spoken of this multiple times. Can you provide something that you are referencing?
It's blindingly obvious that the unemployment rate is controlled to less than full employment, surely you can see that.
Anyway, Google is your friend.
Quote:
During the 1996-1997 period, the unemployment rate has gradually declined and recently been running at levels below what economists believe to be the "natural rate" or NARU (the non-accelerating rate of inflation unememployment rate), that rate at which sustained unemployment can exist without leading to higher wage and price inflation. Unemployment rates below the natural rate (and economic growth above the 'natural' growth rate) cannot be sustained for too long: they would eventually cause higher inflation and lead the Federal Reserve to increase the Fed Funds rate in order to slow growth and prevent a pickup in inflation. Traditionally, the "natural rate" has been estimated to be at 5.5%. As the unmployment rate has been below 5% since the beginnning of 1997, some investors and economists believe that the natural rate might be now lower than 5% because of structural changes in labor market and the economy (the so-called "new economy"); other are instead concerned that we are now below the NAIRU and that wage and price inflation is bound to increase. See the home pages on NAIRU and productivity growth controversies for more on this debate.
http://pages.stern.nyu.edu/~nroubini/bci/Unemploymentrate.htm
Quote:
an "optimum" level of unemployment
You have spoken of this multiple times. Can you provide something that you are referencing?
It's blindingly obvious that the unemployment rate is controlled to less than full employment, surely you can see that.
Anyway, Google is your friend.
Quote:
During the 1996-1997 period, the unemployment rate has gradually declined and recently been running at levels below what economists believe to be the "natural rate" or NARU (the non-accelerating rate of inflation unememployment rate), that rate at which sustained unemployment can exist without leading to higher wage and price inflation. Unemployment rates below the natural rate (and economic growth above the 'natural' growth rate) cannot be sustained for too long: they would eventually cause higher inflation and lead the Federal Reserve to increase the Fed Funds rate in order to slow growth and prevent a pickup in inflation. Traditionally, the "natural rate" has been estimated to be at 5.5%. As the unmployment rate has been below 5% since the beginnning of 1997, some investors and economists believe that the natural rate might be now lower than 5% because of structural changes in labor market and the economy (the so-called "new economy"); other are instead concerned that we are now below the NAIRU and that wage and price inflation is bound to increase. See the home pages on NAIRU and productivity growth controversies for more on this debate.
http://pages.stern.nyu.edu/~nroubini/bci/Unemploymentrate.htm