General Equilibrium Macroeconomic Models Of Unemployment: Can They Explain The Unemployment Path In The Oecd?  

Oleh:

Madsen, Jakob B.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 108 no. 448 (May 1998), page 850-867.
Fulltext: 850.pdf (213.66KB)

Isi artikel

Several theories which seek to explain the high and apparently persistent unemployment in the OECD countries over the past two decades have arisen within the framework of imperfections in the goods and labour markets. Probably the most prominent theories within this class of models are the general equilibrium models of Phelps (1994), Layard and Nickell (1986) and Layard, et al. (1991), labelled structuralist theories of unemployment by Phelps (1994). Common to the structuralist theories is that the low frequency movements in unemployment, or the NAIRU, are determined by structural variables such as unemployment bene®ts, taxes, real interest rates, etc. However, the high frequency movements in unemployment are determined by wage and price surprises, and, in the Layard and Nickell (1986) model also by cyclical mark-ups. Employment is entirely determined by the ®rms' willingness to supply and the ®rms are never sales constrained. By contrast the general equilibrium model of Sarantis (1993) which is in Post Keynesian spirit, suggests that unemployment on all frequencies is mainly an outcome of demand side factors. In this model imperfections in the goods and labour markets are less important determinants of unemployment.

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