THE UPWARD DRIFT in unemployment rates after the late 1960s that
culminated in double-digit unemployment in the recession of the early
1980sh as been a disappointingf eatureo f the nation’se conomicp erformance.
Most analysts see multiple causes behind that performance. One
is the inflation that originated with tight labor markets in the late 1960s
and accelerated with the supply shocks of the 1970s, requiring repeated
doses of demand restraint that raised unemployment. But, in addition,
growing structural problems, broadly defined as changes that have
hampered the smooth matching of vacantjobs and unemployed workers,
may have been important in the performance of this period.
