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Understanding Unemployment Dynamics in the Transition. The Role of Aggregate Demand and Investment

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Author Info
Claudio DE VINCENTI
Marcella MULINO

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Abstract

This paper proposes a theoretical two-sectors growth model for an economy in transition. The model stresses that long term output and employment dynamics as well as the actual transition pace are affected by demand-side factors and their interaction with supply-side factors. It derives a set of feasible dynamic equilibrium paths, that is several steady-state equilibrium values for the unemployment rate. The paper shows the key role of the demand management policy in selecting the actual growth path and transition pace.

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File URL: http://www.mulino.it/rivisteweb/scheda_articolo.php?id_articolo=3612
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Publisher Info
Article provided by SIE - Societa' Italiana degli Economisti (I) in its journal Rivista Italiana degli Economisti.

Volume (Year): 1 (1997)
Issue (Month): 4 (April)
Pages: 91-120
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Handle: RePEc:rie:review:y:1997:v:1:i:4

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