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s economists' political biases. Before Friedman and Phelps, Abba Lerner (Lerner 1951, Chapter 15) developed a version of the NAIRU. Unlike the current view, he saw a range of 'full employment' unemployment rates. He distinguished between 'high' full employment (the lowest sustainable unemployment under incomes policies) and 'low' full employment (the lowest sustainable unemployment rate without these policies).

Ideal unemployment

An alternative, more normative, definition (used by some labor economists) would see 'full employment' as the attainment of the ideal unemployment rate, where the types of unemployment that reflect labor-market inefficiency (such as structural unemployment) do not exist. Only some frictional unemployment would exist, where workers are temporarily searching for new jobs. For example, Lord William Beveridge defined 'full employment' as where the number of unemployed workers equaled the number of job vacancies available. He preferred that the economy be kept above that full employment level in order to allow maximum economic production.

Long run aggregate supply

The concept of full employment has so far been used in conjunction with the long run aggregate supply (LRAS) curve, where long run potential output is also the full employment level of output. Full employment does not mean that there is 'zero unemployment', but rather that all of the people willing and able to work have jobs at the current wage rate. Full employment is the quantity of labor employed when the labor market is in equilibrium.

NAIRU

The following should be understood in discussions of NAIRU: Governments that follow it are attempting to keep unemployment at certain levels (usually over four percent, and as high as ten or more percent) by keeping interest rates high. As interest rates increase, more bankruptcies of individuals and businesses occur, meaning less money to hire staff or purchase goods (the making and distributing of which requires workers, which means jobs). It might also be noted that the main cause of inflation is not high employment, but rather the ability of banks to make money with little to no backing with things of value (commodities such as gold and silver are some examples), thus flooding the market with money and decreasing the value of each dollar already issued in the process, assuming the economy has not kept up to this increase in issued loans. Economists such as Milton Friedman and Dr. Ravi Batra have theorized ways that a modern economy could have low inflation and near full employment (as in close to 100% of those who are not students and are healthy enough to work, and who wish to work at any given point in time), as of yet these have yet to be widely disseminated through the press or introduced by most governments. Paul Martin - former finance minister and past Prime Minister of Canada - once held that full employment could be achieved, yet let go of this idea after gaining power. For more on this see the expose 'Shooting the Hippo' by Linda McQuaig, author and former columnist for many of Canada's top newspapers.

Friedman's view has prevailed so that in much of modern macroEconomics, full employment means the lowest level of unemployment that can be sustained given the structure of the economy. Using the termi本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。