ABSTRACT
INTRODUCTION: WHAT ARE THE POLICY ISSUES? In the mid-1970s unemployment in the UK exceeded 1·5 million or some 6 per cent, with the rate differing between regions. Also in the 1970s, the average duration of unemployment rose. In the early 1960s about 15-20 per cent of unemployed men had been on the register continuously for over one year; in 1972-3, the figure was between 25 per cent and 33 per cent. These are substantial numbers, creating questions about the definition of unemployment, its causes and the range of policy solutions. What, for example, do the unemployment statistics tell us about the labour market? Is unemployment caused by markets re-allocating resources as consumer demands change and industries acquire different comparative advantages? Can large-scale unemployment be reduced by monetary policy? If so, is the desirable amount of unemployment zero?
