Advanced Search
MyIDEAS: Login to save this article or follow this journal

Population, Unemployment and Economic Growth Cycles: A Further Explanatory Perspective

Contents:

Author Info

  • Luciano Fanati
  • Piero Manfredi
Registered author(s):

    Abstract

    In this paper we investigate the dynamic interaction between economic growth, unemployment, income distribution and population growth. The reference framework combines rational behaviour of agents with endogenous fertility and unemployment, while profits are the determinant of the accumulation of firms. In particular the supply of labour is determined by the micro-founded fertility choices of individuals. We first demonstrate, consistently with the empirical evidence, the existence of a positive income growth trend with sustained oscillations, therefore providing an alternative explanation of the relation between growth and cycle. Moreover interesting results are given on the relation between unemployment and growth. So far the literature has traditionally shown a negative relation between unemployment and growth (with the exception of the positive relation arising in a Schumpeter 'creative' disruption context). In contrast, we find a twofold effect of unemployment (via its effects on population) on economic growth: this can be both positive or negative depending on the relative level of the cost of childrearing of employed and unemployed persons, and on the level of unemployment benefits. This allows us to argue that an increase in unemployment benefit-as has occurred in recent years in many countries such as France and Spain-could lead to wide demo-economic fluctuations and to a positive effect of unemployment on economic growth. Copyright Blackwell Publishing Ltd 2003.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.blackwell-synergy.com/servlet/useragent?func=synergy&synergyAction=showTOC&journalCode=meca&volume=54&issue=2-3&year=2003&part=null
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Metroeconomica.

    Volume (Year): 54 (2003)
    Issue (Month): 2-3 (05)
    Pages: 179-207

    as in new window
    Handle: RePEc:bla:metroe:v:54:y:2003:i:2-3:p:179-207

    Contact details of provider:
    Web page: http://www.blackwellpublishing.com/journal.asp?ref=0026-1386

    Order Information:
    Web: http://www.blackwellpublishing.com/subs.asp?ref=0026-1386

    Related research

    Keywords:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
    2. Day, R.H. & Kim, K.H. & Macunovich, D., 1990. "Complex Demoeconomic Dynamics," Department of Economics Working Papers 143, Department of Economics, Williams College.
    3. Rowthorn, Robert, 1995. "Capital Formation and Unemployment," Oxford Review of Economic Policy, Oxford University Press, Oxford University Press, vol. 11(1), pages 26-39, Spring.
    4. Adriaan S. Kalwij, 2000. "The effects of female employment status on the presence and number of children," Journal of Population Economics, Springer, Springer, vol. 13(2), pages 221-239.
    5. Strulik, Holger, 1999. "Demographic Transition, Stagnation, and Demoeconomic Cycles in a Model for the Less Developed Economy," Journal of Macroeconomics, Elsevier, Elsevier, vol. 21(2), pages 397-413, April.
    6. David N. Weil & Oded Galor, 1999. "From Malthusian Stagnation to Modern Growth," American Economic Review, American Economic Association, vol. 89(2), pages 150-154, May.
    7. Gary S. Becker & Kevin M. Murphy & Robert Tamura, 1994. "Human Capital, Fertility, and Economic Growth," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 323-350 National Bureau of Economic Research, Inc.
    8. Momota, Akira & Futagami, Koichi, 2000. "Demographic transition pattern in a small country," Economics Letters, Elsevier, vol. 67(2), pages 231-237, May.
    9. Alexandra Rillaers, 2001. "Education and income inequality: The role of a social protection system," Journal of Population Economics, Springer, Springer, vol. 14(3), pages 425-443.
    10. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, Elsevier, vol. 22(1), pages 3-42, July.
    11. Fanti, Luciano & Manfredi, Piero, 2009. "Neoclassical production theory and growth with unemployment: The stability issue revisited," Structural Change and Economic Dynamics, Elsevier, Elsevier, vol. 20(2), pages 126-135, June.
    12. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780199279173, October.
    13. C Bean & Christopher A. Pissarides, 1992. "Unemployment, Consumption and Growth," CEP Discussion Papers dp0100, Centre for Economic Performance, LSE.
    14. Pugno Maurizio, 1998. "Crescita economica e disoccupazione: recenti sviluppi teorici," Economia politica, Società editrice il Mulino, issue 1, pages 119-166.
    15. Stadler, George W, 1990. "Business Cycle Models with Endogenous Technology," American Economic Review, American Economic Association, vol. 80(4), pages 763-78, September.
    16. Rowthorn, Robert, 1999. "Unemployment, Wage Bargaining and Capital-Labour Substitution," Cambridge Journal of Economics, Oxford University Press, Oxford University Press, vol. 23(4), pages 413-25, July.
    17. Benhabib Jess & Perli Roberto, 1994. "Uniqueness and Indeterminacy: On the Dynamics of Endogenous Growth," Journal of Economic Theory, Elsevier, vol. 63(1), pages 113-142, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Manfredi, Piero & Fanti, Luciano, 2006. "The complex effects of demographic heterogeneity on the interaction between the economy and population," Structural Change and Economic Dynamics, Elsevier, Elsevier, vol. 17(2), pages 148-173, June.
    2. Orlando Gomes, 2008. "Endogenous Growth, Price Stability and Market Disequilibria," Working Papers Series 1, ISCTE-IUL, Business Research Unit (BRU-IUL) ercwp0608, ISCTE-IUL, Business Research Unit (BRU-IUL).
    3. Fanti, Luciano & Manfredi, Piero, 2009. "Neoclassical production theory and growth with unemployment: The stability issue revisited," Structural Change and Economic Dynamics, Elsevier, Elsevier, vol. 20(2), pages 126-135, June.
    4. Roa, María José & Saura, Dulce & Vázquez, Francisco J., 2011. "Economic growth, labor market and demographic patterns," Structural Change and Economic Dynamics, Elsevier, Elsevier, vol. 22(1), pages 81-91, February.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:bla:metroe:v:54:y:2003:i:2-3:p:179-207. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.