Economists have long sensed that the failure of goods markets to clear is a prime reason for the emergence of unemployment. The novel feature of this paper is that it discovers a new theoretical basis proving this assumption. The paper claims that in a permanently growing economy, unemployment may be due to the failure of the markets to provide consumers with ever-new varieties of consumption goods. As the difference between desired and available product widens, effective demand declines, leading on the one hand to unemployment, which exhibits a decisive Keynesian flavour as it is the result of goods markets failures, and on the other hand to an increase in involuntary savings, which provide the financial basis to foster innovation and growth. As the higher growth rate increases the probability of failures in effective demand, it further increases unemployment and increases involuntary savings, resulting in a finite multiplier process.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
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.
Volume (Year): 18 (2004) Issue (Month): 2 (April) Pages: 209-224 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF
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.: