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Looking for work

This is a photograph of people at a job fair.
Job fairs and job centers are often available to help match people to jobs. This fair took place in the U.S. (Hawaii), a high-income country with policies to keep unemployment levels in check. Unemployment is an issue that has different causes in different countries, and is especially severe in the low- and middle-income economies around the world. (Credit: modification of work by Daniel Ramirez/Flickr Creative Commons)

Youth unemployment: three cases

Chad Harding, a young man from Cape Town, South Africa, completed school having done well on his exams. He had high hopes for the future. Like many young South Africans, however, he had difficulty finding a job. “I was just stuck at home waiting, waiting for something to come up,” he said in a BBC interview in 2012. In South Africa 54.6% of young females and 47.2% of males are unemployed. In fact, the problem is not limited to South Africa. Seventy-three million of the world’s youth aged 15 to 24 are currently unemployed, according to the International Labour Organization.

According to the Wall Street Journal, in India, 60% of the labor force is self-employed, largely because of labor market regulation. A recent World Development Report by The World Bank says that India’s unemployed youth accounted for 9.9% of the youth work force in 2010. In Spain (a far richer country) in the same year, the female/male youth unemployment rate was 39.8% and 43.2% respectively.

Youth unemployment is a significant issue in many parts of the world. However, despite the apparent similarities in rates between South Africa, Spain, and India, macroeconomic policy solutions to decrease youth unemployment in these three countries are different. This chapter will look at macroeconomic policies around the world, specifically those related to reducing unemployment, promoting economic growth, and stable inflation and exchange rates. Then we will look again at the three cases of South Africa, Spain, and India.

Introduction to macroeconomic policy around the world

In this chapter, you will learn about:

  • The Diversity of Countries and Economies across the World
  • Improving Countries’ Standards of Living
  • Causes of Unemployment around the World
  • Causes of Inflation in Various Countries and Regions
  • Balance of Trade Concerns

There are extraordinary differences in the composition and performance of economies across the world. What explains these differences? Are countries motivated by similar goals when it comes to macroeconomic policy? Can we apply the same macroeconomic framework developed in this text to understand the performance of these countries? Let’s take each of these questions in turn.

Explaining differences : Recall from Unemployment that we explained the difference in composition and performance of economies by appealing to an aggregate production function. We argued that the diversity of average incomes across the world was explained by differences in productivity, which in turn were affected by inputs such as capital deepening, human capital, and “technology.” Every economy has its own distinctive economic characteristics, institutions, history, and political realities, which imply that access to these “ingredients” will vary by country and so will economic performance.

For example, South Korea invested heavily in education and technology to increase agricultural productivity in the early 1950s. Some of this investment came from its historical relationship with the United States. As a result of these and many other institutions, its economy has managed to converge to the levels of income in leading economies like Japan and the United States.

Similar goals and frameworks : Many economies that have performed well in terms of per capita income have—for better or worse—been motivated by a similar goal: to maintain the quality of life of their citizens. Quality of life is a broad term, but as you can imagine it includes but is not limited to such things as low level of unemployment, price stability (low levels of inflation), and the ability to trade. These seem to be universal macroeconomic goals as discussed in The Macroeconomic Perspective . No country would argue against them. To study macroeconomic policy around the world, we begin by comparing standards of living. In keeping with these goals, we also look at indicators such as unemployment, inflation, and the balance of trade policies across countries. Remember that every country has had a diverse set of experiences; therefore although our goals may be similar, each country may well require macroeconomic policies tailored to its circumstances.

For more reading on the topic of youth unemployment, visit this website to read “Generation Jobless” in the Economist .

Questions & Answers

what is antagonist
Edward Reply
Hi
Odidi
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Mohamed
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Timah
Hi
moha
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domingo
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Mohamed
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domingo
hi
Un
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Mohamed
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domingo
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Inno
what are the factors influencing the level of advance made by commercial banks?
Kobwa Reply
What is Demand and supply
Felix Reply
supply is the ability to sell goods and services at the specific period of time and at the specific price
Kobwa
demand is the ability and willingness to buy goods and services at the specific period of time and at the specific price
Kobwa
what is demand
Sanni Reply
Sanni Saoban, Demand is a kind of need which is backed up by ability and willingness to pay.
Dipam
Demand is the various quantities of goods and services that a consumer is willing and able to buy at various prices within a given period of time
Sharon
Demand means desire for a commodity willingness and ability to purchased that commodity
Bhagabata
desired of good and services, when you try to sell something , you make the buyer need that something in a way that person buys the good or service from you. SUPPLY AND DEMAND
Erik
Am I right or wrong
Bhagabata
ryt
Oppong
demand means the desire for product and being able to purchase goods
Rameez
He or she must have willingness
Bhagabata
buy and sell orders on the foreign exchange.
ay
why should a firm close down when it's unable to pay it's variable cost?
ANDREW Reply
what is oligopolistic competitive market?
ngong
oligopolistic market is the market structure characterized by few sellers with large firm and mostly they produce goods that are differentiate & homogeneous goods
Kobwa
less demand due to assumptions
Inno
exchange of goods and services between countries is call
Hosea Reply
foreign trade
Peace
Butter trade
Ntim
Foreign policy
Bhagabata
international trader should be country
Dennis
international trede
Bakatui
it's called bilateral international trade while that it involves more than two countries is called maltilateral international trade
Kobwa
what is constant opportunity cost
Tiffany Reply
Constant opportunity cost means the value of sacrifice remains constant in every step.
Dipam
Gross Domestic Product GDP
Yusuf Reply
what is g d p
Jayapal Reply
gross daily performance
domingo
these are all amount of goods produced by within the country either by resident of foreigners who live within the country
Kobwa
dont know
Inno
gross domestic products
nabil
How best can a poor country respond to an economic crisis , what does it have to sacrifice.
Bah Reply
they should pay tax as progressive system and should make sacrifice for taxation of their income and land etc
Hamza
how have the nations tries to solve the problem of scarcity in their economies?
Amani Reply
total concentration on to reduce the per unit cost of commodity by technically or whatever
Hamza
the problem of scarcity is solved through three economic system namely socialist,capitalist and mixed economy where in socialist the decision about the allocation of resources is done by the government through central planning and in capitalist all decision are made by individual
Kobwa
and in mixed decision made by market forces and central planning
Kobwa
explain what will happen to producer of green coconut now that we have to lockdown in the kingdom of tonga
Tuha Reply
the demand for coconut will decrease and supply increases which result in the decrease in the price of coconut and the coconut will be more elastic
Hamza
tonga is producing more long run economic good explain the meaning of the statement and its implication on the tonga economy
Tuha Reply
Demand is the various quantities of goods and services that consumer(s)are willing and able to purchase at a price within a time
Muhammad Reply
What is demand
Mc Reply
demand relates with the need of people for their satisfaction.
Mohd
demand is de amount of goods and services a consumer us willing to purchase at a given price over a given period of time
Osei
riDemand is the amount of good and services which consumers are willing and able to buy at a particular peroid of time and at a given price
Miguel
Yes that is the tire thing
samuel
Demand is the quantity of goods and services which consumers are willing and able to purchase at a given price over a period of time
Sundaybha
simply , Demand is the sum up of 1)- desire of the commodity 2)- purchasing power for that commodity
Hamza
demand is the amount of goods and service wen consumers are willing and able to buy them at a give time
Dora

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Source:  OpenStax, Principles of economics. OpenStax CNX. Sep 19, 2014 Download for free at http://legacy.cnx.org/content/col11613/1.11
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