Cyclical unemployment statistics are a specific type of unemployment statistics which indicates that a specific type of unemployment has occurred because there is not enough aggregate demand for jobs or goods in the economy. Cyclical unemployment obtains its name because it varies with the business cycles changes. These unemployment statistics can be persistent, which was one of the contributing factors to the development of the worst international unemployment statistics in history, the Great Depression.
The development of cyclical unemployment develops during the recession portion of a regular business cycle happens and wages do not fall to meet the equilibrium level. A certain level of cyclical unemployment is good for the economy, since it can cause greater complication for a more limited number of jobs. However, if the cyclical unemployment statistics indicate that the fluctuations happen to rapidly, it can have a drastic impact on unemployment statistics.
Cyclical unemployment is also known as Keynesian unemployment, since it is one of the defining issues which Keynesian economists seek to address. Keynesian economic policy states that the best way to address imbalances of cyclical unemployment is to increase government deficit spending or adopt expansionary monetary policy in order to address industrial capacity which is not being used to its full potential, resulting in unemployed capital goods.
Cyclical unemployment statistics are exacerbated by the fact that even if all job opening were to be filled, there would still be unemployed individuals.
Cyclical unemployment is not recognized by economists who adhere to the theories of classical economics.
