Editing Unemployment (section)

===Cyclical unemployment===
[[File:US Unemployment rate 1990 to present.png|thumb|upright=1.5|US unemployment rate, 1990—2022. The increase in unemployment during recessions (shaded) is called cyclical unemployment.]]
Cyclical, deficient-demand, or [[Keynesian economics|Keynesian]] unemployment occurs when there is not enough [[aggregate demand]] in the economy to provide jobs for everyone who wants to work. Demand for most goods and services falls, less production is needed and consequently, fewer workers are needed, wages are sticky and do not fall to meet the equilibrium level, and unemployment results.<ref name="Keynes 2007">{{cite book|title=The General Theory of Employment, Interest and Money |last=Keynes |first=John Maynard |year=2007 |orig-year=1936 |publisher=Palgrave Macmillan |location=Basingstoke, Hampshire |isbn=978-0-230-00476-4 |url=http://cepa.newschool.edu/het/essays/keynes/keynescont.htm |url-status=dead |archive-url=https://web.archive.org/web/20090316094655/http://cepa.newschool.edu/het/essays/keynes/keynescont.htm |archive-date=16 March 2009}}</ref> Its name is derived from the frequent ups and downs in the [[business cycle]], but unemployment can also be persistent, such as during the [[Great Depression]].

With cyclical unemployment, the number of unemployed workers exceeds the number of job vacancies and so even if all open jobs were filled, some workers would still remain unemployed. Some associate cyclical unemployment with frictional unemployment because the factors that cause the friction are partially caused by cyclical variables. For example, a surprise decrease in the money supply may suddenly inhibit aggregate demand and thus inhibit [[labor demand]].

[[Keynesian]] economists, on the other hand, see the lack of supply of jobs as potentially resolvable by government intervention. One suggested intervention involves [[deficit spending]] to boost employment and goods demand. Another intervention involves an expansionary [[monetary policy]] to increase the [[supply of money]], which should reduce [[interest rate]]s, which, in turn, should lead to an increase in non-governmental spending.<ref>
{{cite book
|first = Seymour E.
|last=Harris
|title=The New Economics: Keynes' Influence on Theory and Public Policy
|year=2005
|isbn=978-1-4191-4534-6
|publisher= Kessinger Publishing}}
</ref>