ABSTRACT
In the two previous chapters the alternative approaches to the analysis of aggregate unemployment in excess of the natural rate have been outlined. The market clearing approach favoured by the modern classical economists suggests any such unemployment is a random occurrence requiring no government intervention. In general the labour market like other aggregate markets will be in equilibrium. The disequilibrium approach, on the other hand, implies non-natural unemployment can exist and persist and requires corrective action by the government although the form of that action depends upon the causes of the unemployment that occurs. Knowledge of the latter is required before selection of the appropriate corrective instrument. In this chapter we will consider the empirical evidence that has been advanced to support these alternative ways of examining unemployment. This is mainly in Britain, although we will refer to evidence from other countries where appropriate.
