Tuesday 630

 Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed.

PART 9 The Real Economy in the Long Run
Chapter 28 of 36 Unemployment
Section 2 of 21
…
Losing a job can be a person’s most traumatic economic event.
People rely on job earnings to maintain their standard of living and they get a feeling of personal accomplishment from work.
Job loss creates lower current living standard, anxiety about the future, and reduced self-esteem.
Politicians often speak about how their proposed policies will create jobs and higher wages.
...
We have previously seen some of the determinants of level and growth of a country's living standard.
A country that saves and invests a high fraction of its income has more rapid capital stock and GDP growth than a country that saves and invests less.
One determinant of a country's standard of living is its rate of unemployment over time.
People who want to work but cannot find a job are not contributing to the economy's output of goods and services.
...
In a complex economy with thousands of firms and millions of workers some amount of unemployment is inevitable.
The amount of unemployment varies substantially over time.
When a country can keep at near full employment it achieves a higher level of GDP.
...
The problem of unemployment is considered in two categories: the long-run problem and the short-run problem.
The natural rate of unemployment of an economy is the amount of unemployment the economy normally experiences.
Cyclical unemployment refers to year-to-year unemployment fluctuations around its natural rate of unemployment.
It closely follows the short-run ups and downs of the economy.
The term natural does not imply this rate of unemployment is desirable nor does it imply it is constant over time or impervious to economic policy.
It means this unemployment rate remains even in the long run.
...
We start by examining
· how the government measures the economy's rate of unemployment
· the problems that arise in interpreting unemployment data
· how long the unemployed are typically without work
Next we will discuss
· reasons economies always experience some unemployment
· ways policymakers can help the unemployed
· four factors of the economy's natural rate of unemployment: job search, minimum-wage laws, unions, and efficiency wages
We will see there is no easy way for policymakers to
· solve the various problems that cause long-run unemployment
· reduce the economy's natural rate of unemployment
· alleviate the hardships caused by unemployment
... …
alleviate the hardships
kunan o kanwa
苦難を緩和
… …
Which has been a bigger cause of unemployment, increased imports or advances of technology? ChatGPT:
Technology has been the bigger long-run cause of job displacement, especially in manufacturing.
Imports cause unemployment, but mostly in certain places and industries.
Automation, better machinery, computers, software, robotics, and improved production methods have steadily allowed companies to produce more with fewer workers.
… …
Has the unemployment rate gone up and median wage gone down because of advances of technology? CGPT:
Has the unemployment rate gone up because of advances of technology?
No. Technology has displaced many workers in specific jobs, but the overall U.S. unemployment rate has not shown a long-term upward trend because of technology advances.
…
Has the median wage gone down because of advances of technology?
No. The inflation-adjusted median weekly earnings of full-time wage and salary workers were $335 in Q1 1979 and $376 in Q1 2026, measured in 1982–84 dollars.

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