00:01
So here we're talking about the natural rate of unemployment, which is defined as the long run rate.
00:06
That's exactly what we're talking about in the first question.
00:10
And why are we sort of mentioning that long run? it's because the idea is that in the long run, the economy has the time to adjust to any transitory or temporary macro shocks that could affect unemployment.
00:24
Like lots of news headlines affect unemployment.
00:27
Trade wars, taxes, monetary policy, earthquakes, pandemics, all that stuff affects unemployment.
00:34
When we say a long run economy, we mean an economy that's had time to adjust to any sort of shock and settle back to normal.
00:43
So that would be the natural rate of unemployment.
00:45
If you just let the economy sort of be normal for a while, where it would settle.
00:50
So the economy in the long run, right? the normal, but then the question that is, what is this, right? and this is part two, right? what we're getting? right.
01:03
What is this? it's like, well, you know, they define it in the second question as normal unemployment in long run, which is pretty close to my definition, right? so that's the correct answer for part two, but i just want to rule out those other things.
01:24
The equilibrium rate...