ECON 1102 Lecture Notes - Lecture 30: Nairu, Market Clearing, Marginal Product

• School: Dalhousie University
• Department: Economics
• Course: ECON 1102
• Professor: Boulatoff

Document Summary

Econ1102-chapter 30: unemployment fluctuations and the nairu: employment and unemployment. In the long run, increases in the labour force are more or less matched by increases in employment. In the short run however, the unemployment rate fluctuates considerably because changes in the labour force are not exactly matched by changes in employment. > since the end of wwii, the labour force has grown, thanks to a rising population, increased labour force participation by various groups, especially women, and net immigration of working-age persons (supply side). > every year, some jobs eliminated (in contracting industries), while others are created (expanding sectors) (demand side). > in most years, enough new jobs are created to offset the number of jobs that have been eliminated and to provide jobs for the growing labour force. During periods of rapid economic growth, the unemployment rate usually falls. During recessions or periods of slow growth, the unemployment rate usually rises.