Reasons for unemployment and the main economic theories explaining it.

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The unemployment is a common issue of macroeconomic policy. Unemployment is often debate on two difference views of economist has been considered known as Keynesian between Monetarist.

                                                                     Sunhee an ( Group M)

 The definition of unemployment described people who are able and willing to work at a prevailing wage but they are unable to find a job. To begin with, economists recognised the four key classes of unemployment discussed above - frictional, seasonal, cyclical and structural. In this essay, I will discuss how economists considered the main roots of unemployment as they are seeking different theories and will assess how two economist (Keynesian and Monetarists) approaches to the unemployment problem.

Fundamentally, monetarist and Milton Friedman believed that the money supply is the most important component of economic growth and affects aggregate demand.

Monetarist claims that there are various factors of unemployment.

Firstly, monetarist believed that the unemployment arise due to excessive growth of the money supply leading to excess demand for goods and services. Assume that, if the price rises, the rate of demand will lead to higher price thus there may be a temporary (short run) rise in real output and low unemployment.

However, it may be arises the expectation of higher prices and wages among the people. Besides, if products or services price rises, the demand will go down, thus labour costs will increase the demand of workers fall. This is because firms pursuits to reduce their wage rates by doing discharge their employ.

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Secondly, monetarist called it in particular industry the resulting that Frictional Unemployment it occurs on temporary.

Frictional unemployment always exists even in the best positioned economies, also it can be considered Voluntary Unemployment, because one is looking for work instead of taking any jobs.

Thirdly, technological unemployment is also one of the factors of unemployment. When productivity rates rise then the level of wages can go up without a rise in unemployment.

Firms could pursuit to reduce their workers and cut wages by the increase using machines.

The monetarist are followed monetary policy is defined that a central ...

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The essay has a somewhat jumbled structure. The introduction is clear, but there are multiple conclusions. Sometimes a paragraph consist of one sentence, which shows a lack of understanding and the inability to expand on a point. A clear structure is set up in the paragraph, yet not followed. If I was doing this essay, I would have a paragraph for each cyclical, structural, frictional and seasonal unemployment and explain the causes. Then, I would have a paragraph or two explaining the difference in schools of thought towards unemployment. Some sentences make no sense whatsoever such as "Secondly, monetarist called it in particular industry the resulting that Frictional Unemployment it occurs on temporary." which could easily be sorted with a proof read! Unfortunately some of these sentences really detract from the quality of the analysis, as it suggests this essay doesn't have a strong understanding.

The analysis in this essay is sound. The diagrammatical analysis is good, with there being clear reference to the shifts of curves to show a strong understanding. Sometimes the essay doesn't stay focused, where simply analysis is what was required. For example "Another concern is the factors of unemployment that Structural unemployment occurs when workers have insufficient skills demanded by employers from changes structural in an industry." has the right idea, but the syntax of the sentence makes it seem that they don't understand. There is potential when the essay says "Keynes argued" or "it is argued" as it shows multiple interpretations, yet the backbone analysis isn't always there. It is as simple as stating that a reduction in aggregate demand causes an increase in unemployment, but this essay seems to go about explaining this in a long way. I must stress the necessity in a logical and clear argument!

This essay engages superbly with the question, exploring economic theories beyond the A-Level syllabus. The diagrams don't seem to have transferred, but through the following sentences explaining them I can only assume these are correct. The essay is able to look at the textbook types of unemployment: structural, frictional, cyclical and seasonal and then impose a critical voice using Keynesian and Monetarist theories. I was very impressed with this angle!