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Friedman also made clear that the natural rate of unemployment is not unchanging: “I do not mean to suggest that it is immutable and unchangeable. On the contrary, many of the market characteristics that determine its level are man-made and policy-made” (1968, 9). Friedman goes on to argue, for example, that the strength of union power and the size of the minimum wage make the natural rate higher; their declines in recent years thus make the natural rate lower. He emphasized that improvements in labor exchanges, in availability of information about job vacancies and labor supply, all of which ...more
Not Working: Where Have All the Good Jobs Gone?
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