Frictional Unemployment

BY Meg Gilliland ON Tue, November 01, 2016

In this week’s new Principles of Macroeconomics video, Alex Tabarrok explains the ins-and-outs of a certain type of short-term unemployment -- frictional unemployment. Join us as we continue our deep dive into Unemployment and Labor Force Participation.

Unemployment isn’t generally considered to be a good thing. However, short-term frictional unemployment is part of a healthy, growing economy.

When a company goes out of business or lays off workers, or when a worker quits a job to find a new position, the economy sees a movement of resources from where those resources have low value to where they have high value.

Ready to learn more? Check out the new video and be sure to let us know what you think in the comments.