The natural rate of unemployment consists solely of
A Model of the Natural Rate of Unemployment By STEVEN C. SALOP* Since the publication of Edmund Phelps' volume, the "new" macroeconomics has treated the labor market as a dynamic pro-cess of rational search by unemployed workers for available vacancies. Wages are viewed as at least potentially flexible, though free contracting between workers Determinants of the Natural Rate of Unemployment. The natural rate of unemployment has come down over the years, largely due to improvements in technology. The Internet, for instance, allows employers to post available jobs for little or no cost, or they can search resumes online to find people with the appropriate skills.