Unemployment: still hoping for a miracle?

The Australian unemployment rate has fallen to its lowest level since 1989, and looks likely to fall further, perhaps even reaching the rate of 5 per cent, widely regarded as "full employment". However, this relatively favour able outcome has been achieved only after a cyclical expansion so long and robust that it has been widely regarded as "miraculous". It is important th erefore, to consider whether recent reductions in unemployment will be main tained when the current expansion ends, and whether alternative policies co uld produce stronger and more sustainable growth in employment.