Introduction to Economic Growth and Stability

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Presentation transcript:

Introduction to Economic Growth and Stability Chapter 8

Chapter 8 Table 8.1

Chapter 8 Figure 8.1

Historical U.S. Real GDP http://research.stlouisfed.org/fred2/series/GDPC1/106

Chapter 8 Table 8.2

Employment/Unemployment Categories Chapter 8 Figure 8.2 Employment/Unemployment Categories

Unemployment Rate u = (number unemployed/labor force) x 100% Labor Force Participation Rate = (labor force/total adult population) x 100% http://research.stlouisfed.org/fred2/series/CIVPART?&cid=10

Kinds of Unemployment Structural Unemployment Frictional Unemployment Technological change and/or industry migration Frictional Unemployment Workers voluntarily search for new jobs Cyclical Unemployment Associated with recession Seasonal Unemployment Affects different industries at different times of the year

Potential v. Actual Real GDP Chapter 8 Figure 8.3(a) Potential v. Actual Real GDP

Potential v. Actual Real GDP Potential Real GDP assumes “full employment” i.e., about 6% unemployment http://research.stlouisfed.org/fred2/series/GDPPOT/106 Actual Real GDP (or simply Real GDP) captures the actual unemployment rate http://research.stlouisfed.org/fred2/series/GDPC1/106

Historical Unemployment Chapter 8 Figure 8.3(b) Historical Unemployment http://research.stlouisfed.org/fred2/series/UNRATE/10

Chapter 8 Table 8.3

Historical Price Inflation Chapter 8 Figure 8.4 Historical Price Inflation

Real v. Nominal Interest Rates Chapter 8 Figure 8.5 Real v. Nominal Interest Rates