The Varieties of Unemployment
Critics of government stimulus maintain that the high unemployment currently afflicting much of Europe and North America is not cyclical but “structural,” and thus cannot be alleviated by policies that boost aggregate demand. But, while structural unemployment may appear if current unemployment rates persist, that is not the problem we face today.
BERKELEY – We hear from surprisingly many quarters these days that governments in Europe and North America, and their central banks, should give up on the expansionary policies they have pursued to try to create jobs. The high unemployment currently afflicting the North Atlantic, critics of government stimulus maintain, is not cyclical but “structural,” and thus cannot be alleviated by policies that boost aggregate demand.