| Unlike frictional unemployment, long-term unemployment carries with it the loss of human capital and morale, ultimately threatening the employability of the person. |
| We consider a model with frictional unemployment and staggered wage bargaining where hours worked are negotiated for each period. |
| Unemployment beyond frictional unemployment is classified as unintended unemployment. |
| If there is an inefficient excess of frictional unemployment, it should be reduced by policies that change search behavior and improve the effectiveness of job markets. |
| There is likely to be some frictional unemployment even when there is technically full employment, because most people change jobs from time to time. |
| But how can we find out whether the U.S. economy has too much, too little, or the right amount of frictional unemployment? |
