Erik Hurst on Structural Unemployment

Erik Hurst:

More on Erik Hurst and FT Alphaville on Structural Unemployment « Rortybomb: There was, however, an error in Raghu’s assessment of our work. I am emailing Raghu as well. Raghu reported that we are finding that upwards of 3 percentage points of total U.S. unemployment can be explained by structural forces. That is not what we have found. Preliminary back of the envelop calculations suggest that upwards of 3 percentage points of the unemployment rate in high unemployment rate states like Nevada or Arizona may be due to structural forces – not 3 percentage points of total U.S. unemployment. The amount of total U.S. unemployment explained by structural forces will almost certainly be much less.