Consider two key events in recent economic history; the credit crunch that plunged the world into recession in 2008 and the Fukushima nuclear disaster that struck Japan in 2011. Find data on the path of the monthly harmonized unemployment rate from the start of 2007 onwards for both the US and Japan using OECD.Stat. Answer the following questions:

(a) Describe (i) how US unemployment reacted to the credit crunch; and (ii) how Japanese unemployment reacted to the Fukushima nuclear disaster.

(b) Using the material in this chapter and the previous chapter, make an assessment of which curves were likely to have been affected by these economic shocks-i.e. was it the IS, WS or PS curve that were affected (or some combination of them)? Make sure you justify your answer.

(c) Given your answer to part (b), do you predict that the equilibrium level of unemployment shifted in response to these shocks? Justify your answers.