Unemployment as Economic Crises

Abstract

Chapter 4 introduces analytical frameworks that focus on an economy as a whole. Again, we can distinguish analytical frameworks that are formulated in top-down and bottom-up perspectives. While some top-down formulations permit unemployment to persist without corrective measures being taken, the full-employment situation provides the reference point for analyses. Unemployment results due to disturbances from outside the economic sphere. From bottom-up perspectives, unemployment is a normal outcome of private economic activities. Crises may be a recurrent phenomenon, but they may also describe the ongoing situation in modern economies, against which more acute crises may play out more or less frequently. The role of the public sector as a normal and necessary part of economic activity is also addressed.

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