Inflation & Labour Market Vocabulary

Vocabulary flashcards covering key terms and statistics related to inflation, price indexes, and labour-market concepts from the lecture notes.

Inflation

A persistent and appreciable rise in the general level of prices.

Deflation

A fall in the general price level from one period to the next.

Disinflation

A slowdown in the rate of inflation.

Hyperinflation

A severe and rapid increase in the general price level of goods and services.

Consumer Price Index (CPI)

A measure of the average price level of a basket of goods and services bought by households over time.

GDP Deflator

A broad price index capturing changes in prices of all domestically produced goods and services.

Demand-pull Inflation

Inflation that occurs when aggregate demand rises faster than aggregate supply.

Cost-push Inflation

Inflation generated by rising production costs that lead firms to increase prices.

Imported Inflation

Domestic inflation arising from a depreciating currency that raises import prices and stimulates demand.

Inflation Expectations

Beliefs about future inflation that influence current wage-setting and price-setting behaviour.

Money-supply Growth (as a cause of inflation)

When the money supply expands faster than output, causing demand to outpace supply and prices to rise.

Population of Working Age

All people aged 15 and over (no upper limit).

Labour Force

People of working age who are either employed or officially unemployed.

Not in the Labour Force

Individuals of working age who are neither employed nor actively seeking work (e.g., full-time students, retirees, carers).

Employed

Having paid work, with at least one hour worked in the reference week.

Unemployment

Not having a job but actively looking for work.

Underemployment

Working fewer hours than desired or in roles below one’s skill level.

Full-time Employment

Working the standard or agreed number of hours, typically 35+ hours per week.

Part-time Employment

Working fewer hours than full-time employment.

Casual Employment

Irregular work without guaranteed hours or job security.

Full Employment

A labour-market situation where only frictional and structural unemployment exist.

NAIRU

Non-Accelerating Inflation Rate of Unemployment—the lowest unemployment rate that does not trigger accelerating inflation.

Participation Rate

The proportion of the working-age population that is in the labour force.

Participation Rate Formula

(Labour Force ÷ Working-Age Population) × 100.

Unemployment Rate Formula

(Number Unemployed ÷ Labour Force) × 100.

Underutilisation Rate

A measure combining unemployment and underemployment to show spare capacity in the labour market.

Underutilisation Rate Formula

((Unemployed + Underemployed) ÷ Labour Force) × 100.

Labour Underutilisation (components)

Includes unemployed, hidden unemployed, and disguised unemployed persons.

Frictional Unemployment

Voluntary unemployment arising during job transitions or entry into the workforce.

Structural Unemployment

Unemployment caused by long-term structural changes such as automation or shifts in industry demand.

Cyclical Unemployment

Involuntary unemployment resulting from economic downturns and weak aggregate demand.

Phillips Curve

Illustrates the inverse relationship between inflation and unemployment.

Women’s Workforce Participation Trend

Female participation rose from about 45 % in the 1980s to over 60 %, driven by equality, education, and living-cost pressures.

Casualisation Trend

About 23.7 % of workers (2021) hold casual positions with irregular hours and limited job security.

Gig Economy

Growth of short-term, app-based work arrangements (e.g., Uber) that often lack traditional job benefits.

Current Inflation Rate

2.1 % (latest available figure).

Current Unemployment Rate

4.3 % (latest available figure).

Current Underemployment Rate

5.9 % (latest available figure).

Current Participation Rate

67 % (latest available figure).