How does the civilian unemployment rate compare to the U.S. natural rate of unemployment of 5.3%?...
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How does the civilian unemployment rate compare to the U.S. natural rate of
unemployment of 5.3%? What does this imply about the cyclical rate of
unemployment?
Homework Answers
As per FRED database, Civilian unemployment rate in December 2018 (latest available data) is 3.9%, which is lower than natural rate of unemployment. Since
Civilian unemployment rate = Frictional unemployment + Structural unemployment + Cyclical unemployment, and
Natural unemployment rate = Frictional unemployment + Structural unemployment,
Civilian unemployment rate - Natural unemployment rate = Cyclical unemployment.
When Civilian unemployment rate < Natural unemployment rate, we find that Cyclical unemployment is negative.
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How does the civilian unemployment rate compare to the U.S. natural rate of unemployment of 5.3%?...
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