WHAT IS THE NAIRU? (UPDATED)

[@alexhammond8556]

Genuinely this is such a great video explaining the NAIRU!! I've been confused about this since Year 11 and have my Year 12 Eco trial in three days time! Really a great help, thank you so much.

[@mrsymonds]

Great to hear! Hopefully the NAIRU knowledge came in handy.

[@imokam_2577]

Before you I watched two video on NAIRU but didn't learnt but you cleared it so clearly, I love the way you make content so simple:)

[@kennyboyy]

This video has been SO HELPFUL! I'm studying for my CPA exam and NAIRU has been a difficult concept to grasp with all the wording.

[@nholmstrup407]

This is amazing! Thank you. My teacher has been talking about the NAIRU graph for weeks now and I just didnt understand what he was on about.

[@mrsymonds]

No worries! The NAIRU, such a challenging concept. I'm glad to be of help here.

[@pinayxindia5883]

Stop crying for PhD again and again !!!!! you are the best for us. we also don't want PHD. the best thing is that you properly explained the reason behind Nairu so you are the best. Love you from India 🇮🇳.

[@mrsymonds]

I'm just happy to help out. NAIRU is wicked complicated. Glad to hear it was useful

[@nptmg9072]

Thank you, this helped me during my CFA prep

[@mrsymonds]

I hope the exams went well!

[@detectiveofmoneypolitics]

Economic investigator Frank G Melbourne Australia 🇦🇺 still watching this very informative content cheers Frank

[@mykashmirtraveldiaries687]

Thank you so much... watching this concept half an hour before exams ....🤍♥️

[@mrsymonds]

I hope it helped!

[@dong8622]

Mr symonds you’re my hero

[@mrsymonds]

This comment is BEST. Thanks for watching

[@TheNinjaDwarfBiker]

Taking a macro course as an elective and my university failed to make me understand this concept in 75 mins while you did in 2 mins, congrats

[@mrsymonds]

This is such a great comment. I accept your congrats with thanks

[@zutshi7583]

I was really confused how low unemployment rate can cause cost-push inflation . Thank you!

[@mrsymonds]

Hi Akash -- thanks for the question. This is what I think you mean -- let me know if this is what you're talking about. If there is a low unemployment rate, and companies need extra workers, then these companies will have to offer workers who currently have jobs HIGHER WAGES. By doing this, they can POACH workers from their current jobs and lure them to their firms. BUT! By increasing wages, this will lead to firms pushing up prices for consumers (because firms won't absorb the extra costs)...higher prices will equal higher inflation. The cost-push part: higher wages will increase the COSTS of production...hence, cost-push inflation. Hope this helps.

[@jirensama1622]

@@mrsymonds omgg thanks a lot !

[@naomilezpona1336]

@@mrsymonds BUT we CAN have full employment with price stability! We don't need to have this "trade-off"

[@nayyyy27]

So when there is a hysteresis-nairu would increase right cause it may happen that labour become demotivated or lose their skills after a recession therefore changes in economic condition actually affect Nauru...correct me if I'm wrong!!

[@tias9181]

Thank you loads, my HSC is coming up in a few weeks, needed this. Although I have a question; I just need to clarify if the economy is above the NAIRU it is considered "bad" whereas if its at NAIRU its considered "good" ?

[@mrsymonds]

Hi! GREAT question. I think it depends on what the govt's trying to do. At the NAIRU, it's 'good' because there's no cyclical UE. However, it's going to be hard to reduce the NAIRU further. Above the NAIRU, it's 'bad' because there's cyclical UE but that could be solved with some expansionary macro policies. So, as with many eco things, it depends.

[@shweta8895]

Wow.. Thank you

[@mrsymonds]

You're very welcome. Tx for watching

[@user-ls4be2yp5j]

really helpful! it's easy to understand. thank you!

[@mrsymonds]

That's terrific to hear. Thanks so much for watching. Happy I could help

[@jessyleong4740]

was really helpful ! Thank you!

[@mrsymonds]

Good to hear! Not an easy concept at all.

[@erickrajan7401]

I understand this is all that's needed for the hsc - but I have a real craving to understand things. If NAIRU means infaltion doesn't change - how is it that when we operate below Nairu inflation doesn't keep rising

[@beerus553]

Marks in the Bag

[@mrsymonds]

Do you mean in general or right now? Usually, if the economy is at or below NAIRU, and a govt tries to reduce UE further through macro policy, this will likely be inflationary. NAIRU doesn't necessarily mean inflation doesn't change; it's more about giving you clues about what the consequences of different policies could be.

[@teekak7949]

Great video, thanks!

[@mrsymonds]

No problems! It's such a tricky concept.

[@thanasekaran1830]

Very very helpful thanks a lot sir

[@mrsymonds]

Excellent news! Thanks for sharing and glad to help.

[@yougkg]

Very helpful one! Thanks! 👍🏻

[@mrsymonds]

No problems -- glad it helps! Not an easy concept.

[@sikharanidevi2882]

It is really helpful thank you sir ☺️

[@mrsymonds]

You're very welcome. Glad to help.

[@nwgverified]

I'm confused in you video your definition of the NAIRU is where cyclical unemployment is 0 or full employment but I thought that was the NRU. Isn't the NAIRU more about it being the point where inflation accelerates?

[@mrsymonds]

Thanks for the comment. I can see your point. I've really tried to simplify the comment to the level that's required for the NSW HSC. Technically, the natural rate and NAIRU are different. For our purposes, at the high school level, I find it's sufficient to understand that if we're above the NAIRU, cyclical UE occurs, so the govt can just use expansionary macro policy to grow the economy and reduce inflation...if we're at the NAIRU and below, if we do the same, we'll just inflation. You'll go into MUCH more detail if you follow this through to uni!

[@nwgverified]

@@mrsymonds Yeah, ok that makes sense. Thanks very much :D

[@mrsymonds]

@@nwgverified No worries. Thanks for watching.

[@BenGesus]

bihh ahhh nighhh

[@VidushiHemrage]

Hello! Is the natural rate of unemployment (NRU) the same as the non-accelerating inflation rate of unemployment (NAIRU)?

[@mrsymonds]

Hi! That's a great question. It's tricky. At the higher levels, economists will tell you there are major differences between the NRU and the NAIRU. Where I teach, in Australia, at the high school level, we focus on the NAIRU and it is SIMILAR (but not the same) as the NRU. Hopefully this helps! Thanks for watching.

[@VidushiHemrage]

@@mrsymonds thank you!

[@mrsymonds]

@@VidushiHemrage You're very welcome.

[@lowkaiyang9310]

Hi can I ask what's the difference between NAIRU and NRU ?

[@mrsymonds]

Good question. For the NSW HSC Eco course, nothing. If you go on to study Eco at university, there are lots of differences and it can get quite complex. For ease, and based on the course I teach, I stick to the NAIRU.

[@adrianomeis184]

I think that NAIRU has definitely killed Italian industry. But not the specific concept, rather the way of thinking, the degenerative philosophy behind that acronym. Literally NAIRU means: how many lives are you ready to sacrifice in the noun of price stability, inflation, public debt and so on... there is nothing more cruel

[@mrsymonds]

Hey Adriano..nice to see some passion when people are talking about economics! This is a challenging part of the subject -- the trade off between economic growth and economic development; between boosting production and taking care of the citizens. It's complex.

[@mischaherman6916]

The concept of NAIRU is cruel. Condemning a percentage of the population to who want to work, to the unemployment queues simple to stave off the threat of inflation. Ask your selves this, what is the market bid for the long term unemployed???? $0. By definition, no one wants to hire them. If the federal government offered a voluntary Job Guarantee at a fixed price to anyone who wants to work, this would be a productive, non-inflationary use of these idle resources, as the price is fixed by the government and its not competing for labour already in use by the private sector. Mr. Symonds, its a great educational video, but this idea belongs in the bin (not your fault obviously). For those interested in learning more about this school of thinking, here is a place to start: theconversation.com/explainer-what-is-modern-monetary-theory-72095 Good luck with your HSCs!

[@zackkier6257]

Me realizing that this is bs and is litterally against “trickle down” economics whatever that is.

[@zackkier6257]

But great explanation!

[@mrsymonds]

I'll take the compliment!

[@zackkier6257]

@@mrsymonds yes thank you for educating me🙏🏿