This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

American Economic Review: Vol. 93 No. 2 (May 2003)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter

Explore:

AER - All Issues

AER Forthcoming Articles

Modern Theory of Unemployment Fluctuations: Empirics and Policy Applications

Article Citation

Hall, Robert E. 2003. "Modern Theory of Unemployment Fluctuations: Empirics and Policy Applications ." American Economic Review, 93(2): 145-150.

DOI: 10.1257/000282803321946958

Abstract

Strong and widely accepted evidence shows that the natural rate of unemployment varies over time with substantial amplitude. The frictions in the labor market that account for positive normal levels of unemployment are not simple and mechanical. Instead, as a rich modern body of theory demonstrates, the natural rate of unemployment is an equilibrium in which the volumes of job-seeking by workers and worker-seeking by employers reach a balance controlled by fundamental determinants of the relative prices of the two activities. In recessions, unemployment rises, and job vacancies fall. The natural explanation is an economywide fall in labor demand. But a compelling model that generates a fall in labor demand without a counterfactual fall in productivity has eluded theorists to date. Nonetheless, policymakers have appropriately adopted the view that the natural rate varies over time and is not a simple benchmark for setting monetary instruments.

Article Full-Text Access

Full-text Article

Authors

Hall, Robert E.


American Economic Review


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AER - All Issues

AER - Forthcoming Articles

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us