Six Big Ideas: The natural rate of unemployment
Central bankers' holy grail
Policymakers have spent half a century in search of the natural rate of unemployment. The fifth in our series big economic ideas.
Why does unemployment exist?
If there is a central question in macroeconomics, this is it.
There are few bigger wastes than the loss to idleness of hours, days and years by people who would rather be working.
Unemployment can ruin lives, sink budgets and topple governments.
Yet policymakers do not wage all-out war on joblessness.
Most, like the Federal Reserve, America's central bank, target what is known as unemployment's “natural” rate, at which inflation is stable.
它们大都是像美国央行——美联储那样，把目标锁定在所谓的失业的“自然”比率(unemployment's “natural” rate)，即通胀在其上是稳定的那个比率上面。
The importance of this concept is hard to overstate.
The Fed's argument for its recent interest-rate rises, for example, hinges on stopping unemployment from falling too far beneath the natural rate.
Yet the natural rate is in many respects an article of faith, always sought but never seen.
Where does it come from?
There are several reasons why unemployment cannot simply be eradicated fully.
It takes time for people to move from one job to another: this is said to cause “frictional” unemployment.