This article from several months ago essentially advocates, in terms of how the U.S. government measures it, for more unemployment. Its key points concern the “new normal” of long-term unemployment: is it now hard-wired into the “new economy,” or more transient and amorphous for the better (or worse)? 297 more words
My latest contribution to Global Risk Insights examines whether monetary policy alone can cure the problem of chronic unemployment. Key points include:
- Can infer that new Fed Chair Janet Yellen will maintain current monetary policy due to continued labor market weakness, even though the unemployment rate is falling.
- Impact of U.S. monetary policy can have negative consequences to emerging markets in Asia, Africa, and South America.
- Questionable whether monetary policy can effectively address long-term unemployment.
- Fiscal policy should be tailored to specifically address the needs of the low-to-medium skilled worker.