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  • Unemployment Set to Improve, But Only So Much

    U.S. News - 01/17/2013

    “There’s an increase of about 1 percent in the non-accelerating inflation rate of unemployment. So it’s around 6 percent rather than 5 percent,” says William Dickens, professor of economics and social policy at Northeastern University and former senior economist for Bill Clinton’s Council of Economic Advisers.

    This “non-accelerating rate” is known by economists as the NAIRU. It’s a relatively obscure bit of economic jargon, but some economists see it as one measure of the natural unemployment rate. The idea is that below a particular unemployment rate, inflation starts to speed up. So by Dickens’ reckoning, rising prices could become a worry as unemployment edges toward 6 percent.

    Why?

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