Monday 803

 


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 21 of 21
…
Chapter conclusion
Here we have reviewed the measurement of unemployment and reasons economies always experience some unemployment .
We have noted how job search, minimum-wage laws, unions, and efficiency wages help explain why some workers are always unemployed.
Economists differ in which of these causes of unemployment they consider most important.
…
This chapter offers an important lesson: Although the economy will always have some unemployment, its natural rate changes over time.
Many events and policies can alter the unemployment amount in the economy.
The natural rate of unemployment changes as
· the internet speeds up the job search process
· Congress and states increase the minimum wage
· workers join or quit unions
· firms change their use of efficiency wages
The way we organize society is the main factor driving unemployment rates,
… …
organization of society

shakai no soshiki
社会の組織
... ...
Is it true “sticky wages” are a main reason for extended times of a large rate of unemployment? ChatGPT:
Yes. Sticky wages are one important reason high unemployment can persist, especially after a recession.
When demand for workers falls, wages often do not decline quickly because of long-term contracts, minimum-wage laws, union agreements, employee morale concerns, and employers’ fear wage cuts will reduce productivity or cause their best workers to leave.
If the prevailing wage remains above the wage that would balance labor supply and demand, firms hire fewer workers than the number seeking jobs.
… …
End of chapter 28.
Congratulations! 28/36 = 78% of way to becoming competent economist

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