Track C · MacroNode C3
Unemployment, three ways
Layer 1 · Pocket
~ 30s readThe thirty-second answer
What is this?
Frictional, structural, cyclical. All three look the same on the headline chart. Only the third one responds to demand stimulus. Mistaking one for another is how policy makes recessions worse and recoveries shallower.
Why should I care?
Whether your unemployment is "temporary" or "structural" determines what would help. Reading the same number three different ways gets you three different decisions — about retraining, mobility, or just waiting.
Diagnosis · what each calls for
- Frictional
- labor market plumbing
- Structural
- retraining, mobility
- Cyclical
- demand stimulus