Natural-rate theory and OECD unemployment

Our mission is to examine from the perspective of the intertemporal-equilibrium models of endogenous natural-rate theory the huge swings in unemployment among the OECD countries in recent times. We first look at the huge rise in jobless rates between the early 1970s and the early 1990s throughout the OECD: in the United States a rise from about 5 1/2 per cent to 7 per cent, Canada from about 6 to 10 1/2 , Japan from 1 1/4 to 2 1/4 , Italy from 3 1/2 to about 7 1/4 , the United Kingdom from about 3 3/4 to about 9, France from about 2 3/4 to about 10, and West Germany from 3/4 to 5 3/4 . We then look at the developing recovery of the general unemployment rate, most notably in the United Kingdom and the United States, amid a generally continued elevation of jobless rates among the less educated. We see the mid-1990s surge of unemployment in Germany, France and Italy as another story.