Labor market and its structure theorized. The theory states that free labor always includes some unemployment in the market. Hypothesis originator, Milton Friedman, describes the unemployment baseline rate as unavoidable. Ignoring any cyclical unemployment rates, this is frictional and structural unemployment rates totaled.
Link to This DefinitionDid you find this definition of NATURAL-RATE HYPOTHESIS helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary