Scribd
Upload
22 views1 page

Unemployment As A Macroeconomic Problem: The "Keynesian" View of Unemployment

The document discusses different economic views of unemployment. It explains that economists see unemployment as an inefficient use of resources, as labor is left unused. However, some "new classical" economists argue unemployment may not represent underuse and could have other causes. The major views of unemployment are: 1) The Keynesian view sees it as excess labor supply due to market coordination failures. 2) The classical view sees it as productive job searching by workers to find the best match. In conclusion, the potential problem of unemployment is central to modern economics.

Uploaded by

JUANITA MOLINA
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
22 views1 page

Unemployment As A Macroeconomic Problem: The "Keynesian" View of Unemployment

The document discusses different economic views of unemployment. It explains that economists see unemployment as an inefficient use of resources, as labor is left unused. However, some "new classical" economists argue unemployment may not represent underuse and could have other causes. The major views of unemployment are: 1) The Keynesian view sees it as excess labor supply due to market coordination failures. 2) The classical view sees it as productive job searching by workers to find the best match. In conclusion, the potential problem of unemployment is central to modern economics.

Uploaded by

JUANITA MOLINA
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
You are on page 1/ 1

UNEMPLOYMENT AS A MACROECONOMIC PROBLEM

Economists are always concerned with efficiency in the use of resources.


Resources are used efficiently when they are devoted to their most important or
productive uses, broadly speaking. But it is most clearly inefficient if resources
simply are unused and go to waste. The resource most likely to be underused
(if any resource is underused) is labor. "Unemployment" seems to be an
instance of failure to use the available labor. This is why many economists see
unemployment as an economic problem.

This is quite controversial. Economists of the school of thought called "new


classical" do not regard unemployment as underuse of a resource, and regard
the whole idea of underuse of resources in a market economy as being
confused. From their point of view, unemployment may not be a problem at all --
and if it is, it is a problem for other reasons.

The two major views on unemployment are:

The "Keynesian" view of Unemployment:


Unemployment is an excess supply of labor resulting from a failure of
coordination in the market economy.
The "Classical" view of Unemployment:
Unemployment is job search -- people engaged in the productive work of
looking for a better match between worker and employer.
In any case, the (possible) problem of unemployment is central to modern
economics.

QUESTIONS

1. Which is the difference between the Keynesian approach and the classic one
related to the unemployment.

2. According to your opinion, in relation to both thoughts, argue your position


and say if it is applied to our economy or not.

You might also like