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We have encountered several variables named natural including the natural rate of unemployment, (u n ), the natural rate of interest, (r n ), and
We have encountered several variables named "natural" including the natural rate of unemployment, (un), the natural rate of interest, (rn), and the natural rate of long run growth (gA + gN ).
a.) Provide a precise definition of each variable. Use any graph or math to illustrate what they mean and which model to which they refer.
b.) Is there any relationship between any of these variables? Any of the variables imply one of the others?
c.) Are any of these variables really "natural"? Provide a critical assessment.
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