Principles of Macroeconomics / Unit 5 MAC 0418 short lesson, about 20 seconds
The Natural Rate
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The idea
The natural rate of unemployment is what remains when the economy is neither booming nor in recession: frictional plus structural, with no cyclical unemployment.
In practice
It is never zero, because search and mismatch never stop.
Where people slip
Natural does not mean good or fixed. It arises from current arrangements and institutions, and it changes over time.
Your place on the trail
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