ECN 204 Lecture Notes - Lecture 5: Capital Good, Deflation, Real Interest Rate
22 Oct 2017
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Document Summary
The business cycle consist of alternating increases and decreases in economic activity over time. Phases of the cycle: peak, recession, trough, expansion. Irregular innovation: productivity changes, monetary factors, political events, financial instability, recession of 2008-2009. Cyclical impact: durables and nondurables: durable goods affected most, capital goods, consumer durables, nondurable consumer goods affected less, services. Measurement of unemployment: the unemployment rate is the percentage of the labour force that is unemployed, how the unemployment rate is understated, part-time employment statistics, discouraged workers. Types of unemployment: frictional unemployment, caused by workers voluntarily changing jobs and by temporary layoffs; unemployed workers between jobs, structural unemployment, caused by changes over time in consumer demand and in technology alter the. structure of the total demand for labour, both occupationally and geographically: cyclical unemployment, caused by a decline in total spending (or by insufficient aggregate demand, seasonal unemployment, caused by seasonal factors.
