Tuesday, April 6, 2010

Unemployment holding economy back

While there has been significant changes in consumer spending and overall output, the high unemployment rate remains a big problem holding back the economy. Unemployment has to be tackled in a more aggressive way at this point. I think that the adequate way of coming about this problem would be to continue with expansionary policy bringing the real wages down and then also shorten unemployment insurance. These two things done at the same time will bring down unemployment faster and will allow the economy to grow faster without any hold ups.

1 comment:

  1. The FOMC said in its statement last month that the recovery is likely to be moderate for a time. Low rates of resource use and subdued inflation are also likely to warrant exceptionally low levels of the federal funds rate for an extended period. This has been the case since March 2009

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