Subsidization and Stabilization : Optimal Employment Policy Under Aggregate Uncertainty  

Oleh:

Puhakka, Mikko ; Wright, Randall

Jenis: Article from Bulletin/Magazine
Dalam koleksi: INTERNATIONAL ECONOMIC REVIEW vol. 32 no. 2 (1991), page 513-528.
Topik: employee; subsidization; stabilization; employment policy; aggregate

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: II49.1 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

We study an economy where externalities provide an explicit role for intervention and technology shocks generate aggregate uncertainty. In laissez - faire there is too much unemployment. However, we show how to support the optimal allocation as a decentralized equilibrium using a self - financing linear employment subsidy. Generally, this subsidy is a function of economic conditions, and we characterize the way in which it varies with the shock. A special case of our results indicates that a simple restriction on technology, homotheticity, implies the optimal subsidy is constant, or independent of unemployment.

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