Unemployment, Real Wages, and Aggregate Demand in Europe, Korea and the United States

The trend of Europe seems upward, whereas, there was a jump between the later 2005s and later 2010s in the United States, but no clear trend otherwise. This study empirically analyses the changes in unemployment rates to understand push factors of generating wage pressure and how affecting aggregate demand in the Europe, Korea, and United States. We attempt to empirically analyse the unemployment rates though three countries to analyse the economic effects of real wages and aggregate demand. We introduce having estimated the whole model that the growth of unemployment into the part caused by each of these factors and the part caused by changes in real aggregate demand. The results of this study show that in the long run, there is not only a natural level of employment but also a natural level of real demand are positively related. in the short run. Demand can vary from bring about changes in employment by means of price or wage surprises. The pressure of demand in the labor market shows up strongly in all countries except the United States. The estimated labor-demand equation are consistent with this framework and generally have well defined real wage and demand effects.