Frictional unemployment is joblessness during the transition period when an employee is moving from one job to another. This movement is a result of the professionals’ quest to achieve their career objectives and to seek job satisfaction. It focuses on the period between which a person dumps one job and when he or she secures another one.
Frictional unemployment results into the existence of improved economic efficiency for the employers. It also provides the potentials workers with the humble time to weigh the options they have. In doing so, they get adequate time to analyze various employment opportunities and the settle on the best option. Furthermore, frictional unemployment helps the employees in redefining their career paths by exploiting alternatives at their disposal to obtain their job satisfaction. On the other hand, frictional unemployment is very beneficial to both private and public employers. This is because through this job transition, employers are able to interview many potential employees and pick up the best. This gives such employers confidence in their staff which they can trust and rely on for the achievement of their institutions’ set goals and standards. (Gwartney, Stroup, Sobel and Macpherson 177)
Hyperinflation is a condition when there is an extreme rise in the general price level by about 100 percent per year. (Tucker and Ivrin 287). Reddy Jayaprakash refers to this form of inflation as the most dangerous one in which price levels constantly keeps on rising thus becoming unpredictable. (Reddy 53)
Hyperinflation reduces investments on long term projects especially by the foreign investors. This is because hyperinflation is a product of subsequent and constant increase in inflation. The implication of this scenario is that investors see a state of uncertainty in which they cannot predict the future survival of their investments. The investors’ fear of engaging in long term investments thus is a very big harm to the economy. This situation translates negatively on the volume of production that a country can perform as most businessmen and businesswomen would not wish to take so many risks in production. On the same note, the production and sale of essential goods may be hampered by hyperinflation. Traders tend to hide their products and either sells much of it or less of it during the hyperinflation. (Reddy 64)Their main intention is either to sell more goods during this period of time or sell just bits of their products so as to earn these supernatural profits for a longer period of time. Ironically, instead of these entrepreneurs earning abnormally increased profits through increased production, they rely on price speculations to achieve this. This practice thus waters down business ethics.
Hyperinflation leads to a very big loss on savings. To begin with, it seriously and greatly reduces the value of savings that individuals toiled to accumulate during normal economic situations. This implies that such individuals cannot use their savings as they had planned to. Similarly, new savings are also hampered by this form of inflation. Hyperinflation is characterized by huge spending on even simple and normal goods. This makes money valueless and thus reduced savings. With little savings, not enough capital can be created by the individual citizens for various projects in a country. (Reddy 63)
Unemployment is a state of joblessness that takes different dimensions and forms. The major three types of unemployment are frictional, structural and cyclical unemployment. (Tucker and Ivrin 170).
Frictional unemployment is the state of joblessness that features during the temporary job-searching period. Frictional unemployment may result from voluntary resignation of employees or due to firing of such employees by their employers. However, most cases of frictional unemployment are self-made decisions as these employees seek to get jobs that will satisfy their professional and career quest. This unemployment is very normal to an economy and has no negative effect to the economy. After all, it involves the workers with marketable skills who are either entering or changing labor markets due to lack of appropriate skill-job matching information or just due to a job transition period. (Tucker and Ivrin, 170)
Structural unemployment is a type of joblessness that is caused by a mis-match between the job market skills and the workers skills. (Arnold 127) This unemployment exists when training and human resource development institutions impart irrelevant skills on the potential labor force. This irrelevancy renders such institutions’ graduates jobless as their skills and expertise are not marketable. (Tucker and Ivrin, 264) Similarly, the structural unemployment can be as result of change or an upgrade in technology. This change renders the already acquired skills inapplicable. The workers are therefore rendered jobless and fro them to fit into the job market, they must reciprocate by updating their skills. (Hall and Lieberman 155)
Cyclical unemployment is as a result of economic recession that renders most of the people in a particular country jobless. This implies that this economic changes leads to the retrenchment of many workers than those sustained. (Hoag and Hoag 237). Consequently, this situation leads to a very big gap between the goods produced and the demand for such goods.
Governments have the obligation of providing lasting solutions to unemployment in their countries. However, governments’ commitment to finding lasting solutions may not fully settle all types of unemployment. Frictional unemployment is healthy to the economy as it boosts workers’ competence and efficiency. Again, mobility of labor is economically acceptable and should not be treated as a problem. Nevertheless, the government should avail enough information regarding various employment opportunities to help job seekers make quick and informed decisions.
Governments’ intervention is a fundamental step towards curbing the structural unemployment. Government ministries and departments of higher education should do proper job market research. This will provide the curriculum developers and implementers for professional and technical training institutions accordingly with important information regarding labor market. This would reduce student wastage and ensure their job market suitability after graduating. Furthermore, the government should organize regular workshops and seminars to update its employees on the emerging issues in various job markets. This would solve technologically related structural unemployment.
Finally, the government can avoid cyclical and seasonal unemployment through developing good economic policies that will not lead to huge economic crisis such as the financial and economic recession that the world witnessed in between 2007 and 2008.
Works Cited
Arleen J. Hoag, John H. Hoag. Introductory Economics. 4, illustrated. Singapore:
World Scientific, 2006.
Arnold, Roger A. Macroeconomics. 9. USA: Cengage Learning, 2008.
James David Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson. Economics:
Private and Public Choice. 12,illustrated. USA: Cengage Learning, 2009.
Reddy, R. Jayaprakash. Advanced Business Economics. New Delhi: APH Publishing, 2004.
Robert Ernest Hall and Marc Lieberman. Macroeconomics: Principles and Applications. 5. USA:
Cengage Learning, 2009.
Tucker and Irvin B. Macroeconomics for Today. 7. USA: Cengage Learning, 2010.
Tucker and Irvin B. Survey of Economics. 7. USA: Cengage Learning, 2010.
