Principles of Macroeconomics / Unit 10 MAC 0914 short lesson, about 20 seconds
Frictional Unemployment and the Job Search
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The idea
Frictional unemployment arises because matching takes time. A searcher holds a reservation wage, the lowest offer they would accept. It falls as the search runs on, the best offer rises, and the search ends where they meet.
In practice
Cheaper job-market information shortens the search and lowers frictional unemployment.
Where people slip
Unemployment compensation lengthens the search, raising measured unemployment and the accepted wage.
Your place on the trail
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Builds on
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