Macroeconomic Issue Paper Essay

Financial crisis has heightend our vision of the future. We argon sc bed by the maturation un battle evaluate and argon non confident whether tomorrow miserliness will bring any positive changes. Non-economists utilisation unemployment rates to determine, how good inter bailiwick and the U. S. economy per take a hops in wide terms, the ontogeny unemployment rates suggest that we are at the edge of the deepening sparing recession. Many of us keep to a misleading opinion that the ontogeny unemployment is the cypher result of the current fiscal collapse.In its recent article, the scotch expert (2008) sheds the light onto the study unemployment controversies that also impact received GDP, consumption, and revivify up the development of the credit crisis spiral. Macro sparings of the growing unemployment in the U. S. The Economist (2008) provides the detailed followup of statistics and frugal implications of the growing unemployment in the U. S. On Friday November 7t h he Barack Obama got the news that unemployment had chilliness up to a 14-year high of 6.5% in October and non-farm employment had plunged by 240,000 from family line (The Economist, 2008). The figures are scuppering, and despite the mulish opinion that the current financial crisis is the groom relieve oneself of unemployment, the Economist (2008) suggests that whereas it had been thought that the financial crisis pushed a teetering economy over the edge, it at present looks like the crisis kicked an economy that was already cut. In other words, unemployment rates had been in stages rising even before the disreputable bankruptcy of Lehman Brothers.What makes current unemployment different from altogether previous crises is that those losing their chisels do non transmit bear on force as right a dash as they use to that whitethorn be be receive losses on retirement nest egg and homes have deprived many of the pickax of sitting out of the workplaceforce for a spe ll (The Economist, 2008). In any case, the growing unemployment whitethorn threaten the stability of the U. S. economy in short- and long-run, and macroeconomic consequences of the growing employment instability may slow tear the process of economic recovery in the United States.From the macroeconomic viewpoint, a somebody who is able and unbidden to work and is unable to find a paying(a) job is considered jobless. The unemployment rate is the number of unoccupied workers divided by the total civil labor force, which includes both employed and unemployed and those with jobs (all those willing and able to work for pay) (Layard, 2005). Although the mass of the U. S. race tends to evaluate 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 oft periods privation objective view of the focus unemployment impacts our economic achievements. Unemployment tends to produ ce irreversible macroeconomic effects and requires that state authorities and financial institutions develop sound macroeconomic policies, to slander and prevent the long-run 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 legal action and leads to long-term accredited GDP decrease. to a lower place the growing unemployment pressures, we are un believably to use all available financial and non-financial re cites to the wideest. a good deal unemployment called deficient-demand or cyclic unemployment thus represents a profound form of inefficiency, sometimes called Keynesian inefficiency (Layard, 2005). The results of profound statistical analysis express that we have not yet realize the bottom of the economic crisis (The Economist, 2008) simultaneously, it is very presumptive that statistic al figures are at least(prenominal) distorted and do not form an objective and realistic vision of what processes are currently taking place in the national economy.The problem is not in that the United States is going to be germ the largest external source of potential job-seekers. The problem is in that the United States nookynot produce relevant and undeviating statistical figures that would help address the growing unemployment rates before they hit the record. Macroeconomics lacks angiotensin converting enzyme single universal method for measure unemployment rates. The U. S. Bureau of Labor Statistics counts employment and unemployment on the basis of the weekly survey state 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 omit the self-colored nation layer, including students, retired, and people with mental and bodily disabilities according to BLS these people are neither employed, nor unemployed. When we hear that unemployment rates have reached 6. 5%, what does that opine? 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 potential that the Economist (2008) operates unreliable measurements and risks distorting the real get wind 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 facing the challenges of cyclical unemployment, the real causes of unemployment may vary.According to Keynesian theory, the main causes of unemployment result from insufficient strong 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 classical macroeconomics, minimal wages and taxes may severely change the balance of forces in the U. S. labor markets. disregardless 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 understanding the real causes and economic implications of the current financial difficulties yet, the time has come when the methodology and analytical instruments stinkpot statistics need to be reconsidered. I am confident that while statistical unemployment may cross all commonsensical boundaries, the real picture of unemployment may be alone different.Certainly, thousands of people are being fixed off and drown in the unemployment pocket billiards against their will, but the existing methods of economic and statistical analysis must also be refined otherwise the coming geezerhood are unlikely to being economic relief to the American labor markets. consequence 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 une mployment should be defined 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 outside 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 close to reality, we will not be able to develop reasonable macroeconomic policies, and will fail to harbor national economy from the deepening crisis. References Layard, R. (2005). Unemployment macroeconomic performance and the labor market. Oxford University Press. The Economist. (2008). A direful job to do. November 7th. Retrieved November 18, 2008 from http//www. economist. com/research/articlesBySubject/displaystory. cfm? subjectid=348876&story_id=12583077