英语论文网

e are two main reasons for these structural changes in the economy; the first is that there might be changes in the pattern of demand in certain industries. There might be decline in some industries while in others there are increases. The second is that there might be technological changes or change in the technique of producing commodities.

The structural unemployment often occurs in various regions of the country.

Jodi Beggs reasoned that this type of unemployment might be due to fact that some labour markets have more labour than there are jobs available, and for some reason wages don’t decrease to bring the markets to equilibrium.

According to Richard Pettinger, this type of unemployment occurs when there is a mismatch of skills in the labour market caused due to geographical immobility’s, occupational immobility’s, technological changes and structural changes in the economy.

Real wage Unemployment:

This occurs when wages are driven above the market clearing level by trade unions who use their monopoly power to do this or when government set national minimum wage too high.

It also referred to as the classical unemployment. This type of unemployment occurs when the wage in the labour market is at disequilibrium. In this situation the wages will be sticky downwards.

Seasonal Unemployment:

This situation occurs when in certain seasons of the year some types of workers are demanded for. It occurs when labour demand fluctuates with seasons.in Preserve Articles stated that its a type of unemployment in which certain industries employment workers for a particular season then they are dispersed at the end of the season.

Then on a final note we distinguish between voluntary unemployment and involuntary unemployment. The voluntary unemployment has to with when individuals do not work or desire to work at going or prevalent or prescribed wage in the economy. The involuntary unemployment has to do with when workers desire to work or laid off work or fired from their present job.

Okun’s law

The Okun’s law is a law propounded by a Yale Economist/Historian Arthur Okun. The Okun’s law establishes a statistical relationship between economic growth and unemployment. The law states that when an economy (i.e. GNP) is growing at the rate of 3% the unemployment rate is supposed to be decreasing by 1%. But after it was checked will datas in reality it was seen that it didn’t really represent real life situation. Then the law was reframed and then the GDP was used, where it now stated that at 2% increase in economic growth the unemployment rate is supposed to decrease by 1%. This assertion was confirmed by Abel and Bernanke (2005) when they tested data and found that the economic growth rate (GDP) was at 2% while the rate of unemployment was decreasing at 1%. Thus, the law establishes a negative relationship between unemployment and economic growth.

According to Bernanke, the chairman of the St. Louis Federal Reserve Bank, Okun’s Law is a rule of thumb used to explain the relationship between jobs and growth.

He summarized his idea by saying that the rule of thumb describes the observed relationship between changes in the unemployment rate and the growth rate. He then asserted that to achieve a percentage point f