Cite? That is, for 5% being a “natural” unemployment rate. According to this site – http://en.wikipedia.org/wiki/Natural_rate_of_unemployment – there is “no theoretical basis for predicting the NAIRU” (Non-Accelerating Inflation Rate of Unemployment).
So Friedman had some mathematical formula that would produce the “right” prime interest rate based on the existing money supply? Would that make interest rates higher than they are now, or lower?
It’s pretty elementary stuff.
Natural unemployment is said to be unemployment reflected by job shopping and imperfect information. Or, unemployment caused by people who 1) have jobs out there but are looking for better offers, or 2) have jobs out there but cannot find them because of a lack of information on the employers offering the jobs.
Check out Robert J. Gordon’s “Macroeconomics” for an elementary textbook explanation for the concept.
Aside from that use google and look at any educational or organizational websites you find, most of them are fairly accurate.
There is no way to know the exact natural unemployment rate, but we can go on BLS surveys to get an idea of how many people are unemployed because of frictional and structural unemployment. So we can get an idea of the natural unemployment rate.
As it is, the natural rate is not set in stone, but changes based on the composition of the labor force and other factors. It’s been estimated at around 5% for years though.
Also don’t quote wikipedia at me, it’s about as worthless a source as you might want to use.
Also NAIRU to which Wikipedia was referring isn’t quite the same as the “natural rate” of unemployment.
Well, it is and it isn’t. See this GQ thread: http://boards.straightdope.com/sdmb/showthread.php?t=298205
The difference being?
:dubious: A nonsequitur. An “overheated” economy sometimes means a better job market and makes it easier for the unemployed can find work. That does nothing, of course, for those who are too lazy to work – but that’s a completely different problem.
non sequitur my ass. 
Anyone can work in this country. You may not get the job you want or the pay that fits your desired prosperity level, but we got 3 million illegal alliens “working jobs that American’s don’t want”. That more than makes up for the unemplyment we have in this country.
You said a sound dollar doesn’t matter to someone not earning a dollar. That’s their problem. You don’t go dicking around with the value of my assests just so a few people can find a job “easier”.
The US economic policy is sound. We havn’t had a major crash in almost 100 years.