Explanation:
Kydland and Prescott demonstrated that discretionary policy can be suboptimal because policymakers have an incentive to renege on previously announced optimal plans once private agents have formed expectations.
Explanation:
Structural unemployment occurs due to changes in the structure of the economy, such as technological changes or decline of certain industries, creating a mismatch between skills of workers and available jobs.
No comments yet. Be the first to start the discussion!