cyclical unemployment

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Cyclical unemployment

Unemployment caused by a low level of aggregate demand associated with recession in the business cycle.

Cyclical Unemployment

Unemployment that increases when economic growth decreases and vice versa. Cyclical unemployment increases when demand for products is insufficient for businesses to justify the expense of keeping so many employees on staff. Likewise, the unemployment decreases when demand rises.

cyclical unemployment


cyclical unemployment

the demand deficient UNEMPLOYMENT that occurs as a result of a fall in the level of AGGREGATE DEMAND and business activity during the RECESSION and DEPRESSION phases of the BUSINESS CYCLE.
References in periodicals archive ?
Although other definitions of full employment exist, BLS defines full employment as an economy in which the unemployment rate equals the NAIRU, no cyclical unemployment exists, and GDP is at its potential.
US cyclical unemployment performance has at least been decent by the standards of its peers, then.
5 million more jobs over the next five years and earnings to grow faster than inflation Welfare cap set at PS119 billion for 2015/16, rising to PS127 billion by 2018/19, only state pension and cyclical unemployment benefits excluded ENERGY ?
Although the gap model is the most common approach in the literature, it has an important drawback as there is no unique method of determining potential output and cyclical unemployment.
For instance there are the differences between frictional unemployment versus cyclical unemployment versus structural (or long-term) unemployment (Myrick, 2012; Holzer, 1993; Schwartz, Cohen & Grimes, 1986; Gilpatrick, 1966).
Cyclical unemployment arises from changes in the economy related to the business cycle: as the economy expands, companies produce more goods and hire more employees, and the unemployment rate declines.
Expansionary fiscal and monetary policies commonly have been used to remedy what is known as cyclical unemployment.
In fact, the low cyclical LFP rate is seen as keeping the cyclical unemployment rate from being even higher, because poor employment prospects have induced discouraged unemployed workers to leave the labor force and have prevented marginally attached inactive participants from a return to the job search.
In an earlier article (Garrison 2009), I argued that the Federal Reserve's implicit observance of the Taylor Rule, according to which policymakers split the difference in various proportions between reducing cyclical unemployment and constraining inflation to some target rate (customarily 2 percent), was an ill-fated exercise in learning-by-doing.
However, during the current extended period of global economic crisis, what might have been cyclical unemployment in B&H has become persistent or long term, thus causing the even more deeply embedded--or structural--unemployment; in other words, the drastic increase in the number of unemployed persons and decrease of available job openings as a result of the current global economic crisis has had the effect of rendering cyclical unemployment virtually permanent.