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Wednesday, October 28, 2009

How do I measure the natural rate of unemployment?

I am trying to figure out Potential GDP, but for the purpose of that I need to calculate the GDP gap. I need to know how much is the cyclical unemployment. I have the unemployment rate, but I don%26#039;t know how to find the natural rate of unemployment. Does anybody know if it is a fixed rate or how to calculate it, having in mind I need it for a introductory course of macroeconomics. I have data for real GDP over time, unemployment rate and CPI. Thank you very much for the help.



How do I measure the natural rate of unemployment?

The natural rate of unemployment is not set. It fluctuates



in relation to the expected rate of inflation. Economists generally use 4% as the natural rate of unemployment.



http://en.wikipedia.org/wiki/Natural_rat...



http://www.j-bradford-delong.net/multime...



http://thirdworldtraveler.com/Economics/...

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