Thursday, December 9, 2010
Is the increase in unemployment cyclical or structural? In an article released today by the IMF, Mai Dao and I summarize some new evidence on this topic. A recovery in output, using monetary and fiscal policy tools, takes too long to lift the boats of the long-term unemployed, and even then does not give them much of a lift. But whether it’s cyclical or structural, unemployment takes a severe human toll and merits a decisive policy response, as we discuss in the article. A longer version is available here.
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