Forecasting falling jobless rate in Arkansas

Arkansas' unemployment rate should drop as the state replaces jobs lost in the manufacturing sector with service-sector jobs, a university economist says. The quarterly forecast by John Shelnutt, senior research economist at the University of Arkansas at Little Rock's Institute of Economic Advancement, was released Wednesday by UALR. In the report, titled "Relying on Services for Job Recovery," Shelnutt says Arkansas, like the rest of the country, is slowly recovering from major manufacturing job losses. …

…the costs of unemployment which is done by the president and congress, as well as built in stabilizers. Some of the automatic stabilizers include transfer programs such as welfare, and the progressive tax system. The only problems with the fiscal policy are time lags, and difficulty of estimating the GDP, as well as politics and the crowding out effect. The fiscal policy we currently exhibit is called Keynesian after Keynes and has been ongoing since 1936.