The natural rate of unemployment

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The natural rate of unemployment is the rate of unemployment that exists when the economy is at its maximum sustainable rate of output, also known as potential GDP. It is the rate of unemployment that exists when there is no cyclical unemployment or demand-deficient unemployment. It is often considered to be the "normal" unemployment rate and can be affected by structural factors such as changes in the composition of the labor force or advancements in technology. It can be thought of as the lowest level of unemployment that an economy can achieve without generating inflationary pressures. public policy can influence it in the long run but cannot permanently reduce it.

The Natural Rate of Unemployment