Two Economics Question?

Question

Why is it difficult to know which measured rate of unemployment corresponds to "full employment," and why is there currently uncertainty about the level of NAIRU?

What is the current unemployment rate? (hint: the update on the unemployment rate is usually released the first friday of each month) Do you think this unemployment rate is generally considered to be above, below or equal to NAIRU?

Answer 1

Some problems are - it's hard to predict precisely how much frictional and structural unemployment requires current economy to function efficiently. Another thing is - business cycles - NAIRU should be adjusted for it.

Current NAIRU for US is 5.2% and unemployment level a bit below this level (5.5% in may).

http://www.bls.gov/

http://www.economagic.com/em-cgi/data.ex...