Even in a "full employment" economy there is some unemployment, as new workers enter the work force looking for jobs, or people change jobs. The longer the time it takes to find a job, the higher the unemployment rate go out be. However, if people are non working (even if merely between jobs) they are noet producing heavys and services, and also buzz off less income to grease one's palms goods and services.
In general, therefore, unemployment is inverse to GDP growth. If unemployment is high, purchase power in the macro economy will restrained, consequently effective demand, and GDP growth wil
slow or even go into recession. If unemployment is low, the economy will be infused with purchasing power, and GDP growth will be higher.
The inputs on each side of the cycle (wages and the supply of goods) create the outputs for the other side.
The opposite case can also happen, in the form of a bubble, with optimistic assumptions about economic prospects beseeming a matter of faith (Galbraith, 1988, p. 3). People begin to buy goods (such as real estate) not for use but in anticipation of profitable resale, leading ultimately to a crash. Thus, eyepatch rapid growth and low unemployment go together, and are generally good, they can become too much of a good thing and lead to a crash.
Galbraith, John Kenneth (1988). The Great dismantle: 1929. Revised Edition. Boston: Hou
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