What is ?
1-)Structural
2-)NAIRU
3-)Exchange Rate
Structural Unemployment
It is that type of unemployment that lasts long. This is mainly because of the shifts in the economy. It occurs when there is no match between the requirement of skills that companies look for and the skill that the labors can offer. It can also arise when there is immobility and lack of training and education. Example: In the modern market trends where new technologies have come into picture the workers are forced out from the work as they lack training, education and skills. Those workers cannot move to high employment opportunity areas as there is no mobility and lack of skills.
NAIRU
Non - Accelerating Inflation Rate of Unemployment. It is the level of unemployment which is specific and does not cause increase in inflation. If the unemployment level is below NAIRU it will lead to inflation. It is calculated by subtracting the Phillip curve slope from the unemployment rate of the given year. Due to the shifts in labor supply and demand the NAIRU changes overtime.
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