The Natural Rate of Unemployment (NARU) is something really worth thinking about while millions go jobless in the era of coronavirus.
Simply put, NARU is the idea that a basic level of unemployment is natural. NARU is accepted by Republicans and Democrats even though no one has ever been able to say what the natural rate of unemployment is in a functioning economy.
Here is the fundamental problem with NARU: those people seeking work and being unable to find it, something I can relate to, would never agree with there being a natural rate of unemployment. The natural rate of unemployment is a policy choice to not provide a jobs guarantee.
The most important thing to remember about NARU is that the idea of some people being out of work is considered a good thing by both parties, most economists, and I’m guessing every corporation.