Cyclical Unemployment

Cyclical unemployment occurs when an economy's output deviates from potential GDP- i.e. the long-term trend level of output in an economy.  When an economy's output is higher than the level of potential GDP, resources are utilized at levels higher than normal and cyclical unemployment is negative.  Conversely, when an economy's output is lower than the level of potential GDP, resources are utilized at levels lower than normal and cyclical unemployment is positive.

Put simply, cyclical unemployment is unemployment associated with business cycles- i.e. recessions and booms.

Terms related to Cyclical Unemployment:

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Why 0% Unemployment Isn't Actually a Good Thing

By Mike Moffatt

• Unemployment
• Frictional Unemployment
• Structrual Unemployment

About.Com Resources on Cyclical Unemployment:

• Would 0% Unemployment Be a Good Thing?
• Types of Unemployment
• Globalization, Unemployment and Recessions. What is the Link?

Writing a Term Paper? Here are a few starting points for research on Cyclical Unemployment:

Journal Articles on Cyclical Unemployment:

• Sectoral Shifts and Cyclical Unemployment
• Cyclical Unemployment: Sectoral Shifts or Aggregate Disturbances?
• Sectorial Shifts and Cyclical Unemployment Reconsidered