Keynesian economics Essay
In the world Libya is noted to have the highest rate of unemployed citizens. In Nigeria we have the problem of unemployment it has become a major problem. Unemployment Rate in Nigeria increased to 23. 90 percent in 2011 from 21. 10 percent in 2010. Unemployment Rate in Nigeria is reported by the National Bureau of Statistics. From 2006 until 2011, Nigeria Unemployment Rate averaged 14. 6 Percent reaching an all time high of 23. 9 Percent in December of 2011 and a record low of 5. 3 Percent in December of 2006.
In Nigeria, the unemployment rate measures the number of people actively looking for a Job as a percentage of the labor force. John Maynard Keynes who was once a dent of Alfred Marshall introduced what he thought would completely solve the unemployment problem which is called the Keynesian unemployment, from the sass’s to sass’s government tended to follow the Keynesian policy on how to control the economy and because the need for the solution to unemployment was essential UNEMPLOYMENT Unemployment can be expresses either as a number (e. G. 1. Million) or as a percentage (e. G. Per cent). But we should consider the group of people who
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The labor force is defined as: those in employment (including the self-employed, those in the armed forces and those on government training schemes) plus those who are unemployed. Thus if 22. Million people were employed and 2. Million people were unemployed, the unemployment rate would be: T There are three main categories of unemployment. They are: Structural unemployment This is a serious type of unemployment where the labor demand is less than the supply in an individual labor market economy.
Under the structural unemployment there are sub types; one example is the regional unemployment this is said to be of existence when there is a lack of mobility of factors of production between the regions. During the post-war period, the South of England has tended to be at full employment while regions such as Northern Ireland have constantly suffered from unemployment. Another example is the sector unemployment, shipbuilding and steel industries declined harshly in the late sass’s and early sass’s leaving a substantial number of skilled workers unemployed.
Unfortunately their skills were no longer desired in the economy rendering them unemployed and without retraining and possible transfer, they were therefore unable to adapt to the varying demand. Technological unemployment is another example under the structural unemployment; this is when groups of workers across industries may be put out of work by new technology. Again, with no retraining and geographical mobility these rockers may stay unemployed. Cyclical or demand-deficient unemployment This is a type of unemployment which could also be referred to as Keynesian “demand deficient” unemployment.
Economies tend to face business cycles; these are activities from boom to recession over time. This type of unemployment occurs when the economy is not on boom. It is when there is inadequate aggregate demand in the economy for all workers to get a Job. In a recession not Just the workers get unemployed but the capital too is neutralized, so factories and offices can stay vacant and machineries and equipments will lie idle. According to Lain Anderson cyclical unemployment is caused by a lack of demand in the economy, Frictional, seasonal unemployment and structural unemployment are caused by supply side effects.
Frictional unemployment Most workers who lose their Jobs move fast into fresh ones. This is a type of transitional unemployment because of the way people move between Jobs, For example, newly superfluous staff or workers getting into the labor market (such as graduates of the university) may take time to find proper Jobs at wage rates they are Defective information in the labor market may worsen the frictional unemployment f the unemployed are unaware of the available employment opportunities.
Some of the frictionally unemployed may opt not to accept Jobs if they believe the tax and benefit system will decrease significantly the net increase in income from having paid work. There are disincentives for the unemployed to accept work after this happens. Seasonal unemployment Workers such as the construction workers or workers in a tourist industry, tend to have a seasonal routine of working. Seasonal unemployment happens to rise in the winter when some of these workers will be laid off, whilst unemployment falls in the summer when they are taken on again.
There is little that can be done to avoid this pattern occurring in a market economy where the demand for labor varies through the year. Seasonal unemployment exists because certain industries only manufacture or allocate their products at certain times of the year. Industries where seasonal unemployment is common include farming, tourism, and construction.