LABOR ECONOMICS
LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Chapter 12, Problem 7RQ
To determine

Explain the intertemporal substitution hypothesis.

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What is the intertemporal substitution hypothesis? Does this argument provide a convincing account of the cyclical trend in the unemployment rate?
Is the increase in labor force participation rates among women better thought of as causing an increase in cyclicalunemployment or an increase in the natural rate of unemployment? Why?
In 2009, Papua New Guinea had an estimated natural rate of unemployment equal to 4.7% and an actual unemployment rate equal to 4.3%.  What was the size of cyclical unemployment?
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