58. Would 0 % unemployment be a good thing?

Full employment is a condition of the national economy where all or nearly all persons willing and able to work at the prevailing wages and working conditions are able to do so . It is defined either as absolutely 0% rate of unemployment as by james tobin.

NAIRU- Non accelerating inflation rate of unemployment.

Whenever economists talks about NAIRU they mean to say 0 % unemployment or full employment. The theory says that inflation does not rise or fall when the unemployment equals the natural rate. This is where the NAIRU is derived.

Joblessness cannot be abolished by high demand; the level of the NAIRU thus depends on the degree of supply side unemployment. It includes frictional, structural and classical unemployment.

CYCLICAL UNEMPLOYMENT- It is the fluctuating unemployment that coincides with the business cycle. It is a repeating short term problem for most economies. It increases during recession and decreases during recovery and expansion. People who experience such unemployment are usually laid off during recession and rehired some months later.

FRICTIONAL UNEMPLOYMENT - It is the unemployment that arises as part of the normal turnover of the labour.

STRUCTURAL UNEMPLOYMENT - It occurs when there is a mismatch between the characteristics and skill of the people looking for work and those characteristics and skills desired by potential employers.

CONCLUSION :-

If 0% unemployment is attained in a country, it would be terrific for the country but few percent of unemployment is required so that some work can be done. Otherwise no workers will be left to do that work because of the above 3 factors.