Macroeconomic Issue Paper Essay

Financial crisis has changed our vision of the future. We ar sc ard by the development unemployment place and be not sure-footed(p) whether tomorrow preservation get out bring any positive changes. Non-economists use unemployment rates to determine, how well worldwide and the U. S. economy performs in simple terms, the growing unemployment rates suggest that we are at the edge of the deepening scotchal recession. Many of us clasp to a misleading opinion that the growing unemployment is the rank give of the rate of flow fiscal collapse.In its recent article, the Economist (2008) sheds the light onto the major unemployment contr e squarelywheresies that to a fault impact real gross domestic product, consumption, and speed up the development of the credit crisis spiral. macroeconomics of the growing unemployment in the U. S. The Economist (2008) translates the detailed review of statistics and economic implications of the growing unemployment in the U. S. On Friday Nove mber 7th he Barack Obama got the refreshfuls that unemployment had shot up to a 14-year high of 6.5% in October and non-farm employment had plunged by 240,000 from September (The Economist, 2008). The figures are threatening, but despite the persistent opinion that the catamenia financial crisis is the direct lawsuit of unemployment, the Economist (2008) suggests that whereas it had been thought that the financial crisis pushed a teetering economy over the edge, it now looks like the crisis kicked an economy that was already down. In other words, unemployment rates had been gradually rising even before the notorious unsuccessful person of Lehman Brothers.What makes current unemployment different from all previous crises is that those losing their seams do not present campaign force as quickly as they used to that may be because losses on retirement savings and homes have deprive many of the option of sitting out of the workforce for a darn (The Economist, 2008). In any ca se, the growing unemployment may threaten the stability of the U. S. economy in short- and long-run, and macroeconomic consequences of the growing employment instability may soft down the process of economic recovery in the United States.From the macroeconomic viewpoint, a person who is able and impulsive to work yet is unavailing to find a paying job is considered jobless. The unemployment rate is the number of un active workers divided by the total civilian labor force, which includes both employed and indolent and those with jobs (all those willing and able to work for pay) (Layard, 2005). Although the majority of the U. S. population tends to appreciate the quality of national economic performance through the prism of the changing unemployment rates, these rates are notoriously difficult to measure.As a result, we often lack objective view of the way unemployment impacts our economic achievements. Unemployment tends to produce irreversible macroeconomic effects and requ ires that state authorities and financial institutions develop estimable macroeconomic policies, to minimize and prevent the long-term consequences of the deepening economic recession. In general terms, poverty, crime, and healthcare issues are the three direct consequences of the growing unemployment. In terms of economics, unemployment severely impacts purchasing activity and leads to long-term real GDP decrease.Under the growing unemployment pressures, we are unlikely to use all for sale financial and non-financial reextractions to the fullest. Much unemployment called deficient-demand or cyclical unemployment thus represents a fundamental form of inefficiency, sometimes called Keynesian inefficiency (Layard, 2005). The results of profound statistical analysis demand that we have not yet hit the bottom of the economic crisis (The Economist, 2008) simultaneously, it is very probable that statistical figures are at least distorted and do not form an objective and realistic vi sion of what processes are shortly taking place in the national economy.The problem is not in that the United States is going to become the largest international source of potential job-seekers. The problem is in that the United States cannot produce relevant and reliable statistical figures that would answer address the growing unemployment rates before they hit the record. Macroeconomics lacks one unity universal method for measuring unemployment rates. The U. S. Bureau of Labor Statistics counts employment and unemployment on the basis of the weekly look into great deal are considered employed if they did any work at all for pay or profit during the survey week (Layard, 2005).As a result, the BLS does not account full-time students and prisoners as employed. Furthermore, those who are jobless but are actively involved into job search are also considered as unemployed. Economic professionals seem to do away with the whole population layer, including students, retired, and peo ple with mental and physical disabilities according to BLS these people are neither employed, nor unemployed. When we hear that unemployment rates have reached 6. 5%, what does that loaded? Does that mean that 6. 5% of the American population is no longer willing to work? Does that mean that 6.5% of population is actively looking for new jobs? Does that mean that 6. 5 percent of the U. S. population is likely to remain unemployed in the long-term period? Statistical research does not provide the answers to these questions. That is why it is very probable that the Economist (2008) operates unreliable measurements and risks distorting the real meet of the American labor market. Macroeconomics lacks agreement as for the causes and the consequences of unemployment. When the Economist (2008) implies that we are face up the challenges of cyclical unemployment, the real causes of unemployment may vary.According to Keynesian theory, the main causes of unemployment result from insufficie nt effective demand for goods and economy (Layard, 2005). Some economists are confident that the current economic crisis can hardly be the direct cause of the growing unemployment, and that structural unemployment does not threaten economic stability. From the viewpoint of pure macroeconomics, minimum wages and taxes may severely change the balance of forces in the U. S. labor markets. Regardless the exact cause of unemployment in the U. S., non-economic population lacks relevant instruments that would help re-interpret statistics. We are used to the thought that statistical analysis is the source of reliable and unbiased information and that statistics may open the gateway to judgment the real causes and economic implications of the current financial difficulties yet, the time has come when the methodological analysis and analytical instruments behind statistics need to be reconsidered. I am confident that while statistical unemployment may cross all reasonable boundaries, the re al picture of unemployment may be completely different.Certainly, thousands of people are universe laid off and drown in the unemployment pool against their will, but the be methods of economic and statistical analysis must also be minute otherwise the coming years are unlikely to being economic relief to the American labor markets. Conclusion Statistical research suggests that the rates of unemployment in the U. S. have reached unbelievable 6. 5%. The Economist (2008) writes that the current financial crisis may not necessarily be the direct cause of the current unemployment shakes.Regardless the specific causes and consequences of unemployment in the U. S. , the national economy lacks relevant economic instruments that could be used to measure statistical variations in labor markets. Macroeconomic theorists lack unanimous agreement on the way unemployment should be delineate and measured. The time has come when the major macroeconomic indicators and the means of measuring them should be refined. Non-economists are misled by inaccurate statistical data that causes panics in the labor markets.Unless we are able to evaluate the full labor market potential, and until we are confident that the results of the statistical analysis are at least soused to reality, we will not be able to develop reasonable macroeconomic policies, and will fail to protect national economy from the deepening crisis. References Layard, R. (2005). Unemployment macroeconomic performance and the labor market. Oxford University Press. The Economist. (2008). A painful job to do. November 7th. Retrieved November 18, 2008 from http//www. economist. com/research/articlesBySubject/displaystory. cfm? subjectid=348876&story_id=12583077