ECON 1101 Chapter Notes - Chapter 7: Frictional Unemployment, Business Cycle, Structural Unemployment

• School: Dalhousie University
• Department: Economics
• Course: ECON 1101
• Professor: T.Cyrus

Document Summary

The long run is just a succession of short runs anyway so what we do in the short run certainly matters in the long run. Keynes famously said, in the long run, we are all dead, meaning that the short run can be all that really ends up mattering to us. Figure 7. 1 shows the growth path of real gdp over the 1926-2010 period, and table 7. 1 lists characteristics of recessions over the 1947-2010 period. Recession (or contraction): a period in which the economy is growing at a rate significantly below normal. A more technical definition: a period during which real gdp falls for at least two consecutive quarters. Peak: the beginning of a recession, the high point of economic activity prior to a downturn. Trough: the end of a recession, the low point of economic activity prior to a recovery. Expansion: a period in which the economy is growing at a rate significantly above normal.