The Factors Affecting Unemployment A Study Of Us Economy...

An Analysis of the Factors Effecting Unemployment: A Study of US Economy in 1985-2014 Introduction In the past few years, the US unemployment rate dynamically fluctuated: more than five millions jobs were cut in November 2008 due to economic crisis, but recently, the unemployment rate dropped by 0.3 point after eight years. Figure 1 revealed how the US unemployment rate fluctuated over the last three decades. On the other hand, one of the major signs of an economy’s health and the testimony of economic growth, unemployment rate is always in the spotlight, and governments and policy makers also have been trying to increase its utilization of the working force in many ways. Both the dramatic fluctuation and government attempts are usually associated with the determinants of unemployment rate and the relationships between those determinants and unemployment. As a result, there have been many studies of those relationships from varied perspectives over several decades. Figure 1: US unemployment rate in 1985-2014 One of the most accepted theories is Okun’s law. Arthur Okun (1962) described the relationship between a country’s gross domestic product (GDP) and unemployment rate. Specifically, with every one percentage in unemployment above a â€Å"natural† level there is an associated two or four percent decrease in GDP holding everything else constant. Nevertheless, while most economists in the macroeconomic field agreed with this theory, some experts held different opinions withShow MoreRelatedFactors Affecting The Manufacturing Industry Of Ecuador1712 Words   |  7 Pagesconsiderable skills in such occupations as weaving, their wages were among the lowest in the labor force, and as machine-weaving became more widespread their skills were increasingly obsolete. In the 1980s, the government offered special credits â€Å"FACTORS AFFECTING THE EMPLOYMENT IN MANUFACTURING INDUSTRY OF ECUADOR† 11 and loans to encourage a transition from artisan workshops to small factories. The largest number of artisans produced clothing and furniture. This group included dressmakers, tailors, shoemakersRead MoreThe Effects Of Unemployment On The Economy1656 Words   |  7 Pagesscarcity of resources exists in the economy. This means in the sense that only finite and insufficient resources are available to satisfy the needs and wants of all human beings. Since resources are scarce the basic idea revolves around how resources should be allocated and utilized effectively and efficiently. Moreover how resources can be put to use to give out a maximum efficient output. Human beings are one of the greatest resources present in the economy. 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