4.3 Exercises
Exercise 1: Tight labour markets
Read “Where have all America’s workers gone?” The Economist, 2023.
- What are the characteristics of a tight labour market? Does it mean the unemployment rate is zero?
- What were the explanations for the tight labour market? How did each factor affect the unemployment rate and the labour force participation rate in the economy?
Exercise 2: Low unemployment
Read “Why American unemployment needs to rise,” The Economist, 2022.
- Did the unemployment rate go to zero when so many vacancies were unfilled?
- What was observed in the labour market when unemployment rate became much lower than its usual average? What was the impact on wage? On productivity?
- What could potentially alleviate the tightness in the labour market?