Answer:
Step-by-step explanation:
In his book "Principles of Economics," N. Gregory Mankiw discusses two types of unemployment: frictional unemployment and structural unemployment.
1.FRICTIONAL UNEMPLOYMENT : This type of unemployment occurs when individuals are between jobs or transitioning from one job to another. It is usually temporary and voluntary to some extent. Frictional unemployment can arise due to factors such as people searching for better job opportunities, recent graduates entering the job market, or individuals relocating to different regions.
STRUCTURAL UNEMPLOYMENT : Structural unemployment arises from imbalances in the labor market caused by changes in the structure of the economy. It occurs when there is a long-term decline in demand for certain types of skills or industries. Structural unemployment can be caused by technological advancements, globalization, shifts in consumer preferences, or changes in government policies. For example, automation replacing workers in manufacturing industries can lead to structural unemployment. This type of unemployment requires retraining or acquiring new skills to match the evolving needs of the labor market.
Overall, frictional unemployment is mainly caused by search and mobility frictions, while structural unemployment results from shifts in the structure of the economy and required adjustments in the workforce.