Unemployment and Growth in the Long Run: An Efficiency-Wage Model with Optimal Savings
AbstractThis paper develops an efficiency-wage model of steady-state equilibrium with labor-augmenting technical progress, and uses the model to explore the long-run relationship between unemployment and growth. The rate of productivity growth is either specified exogenously or determined endogenously (from learning by doing). In both cases, we preserve key results of the Shapiro-Stiglitz efficiency-wage analysis without growth. Our model, however, also yields some striking new results. For inStance, an exogenous increase in the growth rate may raise the rate of efficiency-wage unemployment, and a once-for-a1l rise in the labor force may reduce the unemployment rate in the endogenous-growth case.
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Bibliographic InfoPaper provided by Carleton University, Department of Economics in its series Carleton Economic Papers with number 00-01.
Date of creation: Apr 1997
Date of revision: May 1999
Publication status: Published: Revised version in International Economic Review, Vol. 43, No. 3 (August 2002), pp. 875–894
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Other versions of this item:
- Richard A. Breche & Zhiqi Chen & Ehsan U. Choudhri, 2002. "Unemployment and Growth in the Long Run: An Efficiency-Wage Model with Optimal Savings," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(3), pages 875-894, August.
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
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- Xavier Raurich & Valeri Sorolla, 2011.
"Growth, Unemployment and Wage Inertia,"
UFAE and IAE Working Papers
879.11, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Eva, MORENO-GALBIS, 2004. "Unemployment and Endogenous Growth with Capital-Skill Complementarity," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2004001, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Howard Petith, 2005. "Capitalism, Unemployment and the Transition to the Contemporary Pattern of Growth," Working Papers 194, Barcelona Graduate School of Economics.
- Brecher, Richard A. & Chen, Zhiqi & Choudhri, Ehsan U., 2010. "A dynamic model of shirking and unemployment: Private saving, public debt, and optimal taxation," Journal of Economic Dynamics and Control, Elsevier, vol. 34(8), pages 1392-1402, August.
- Richard A. Brecher & Zhiqi Chen & Ehsan Choudhri, 2007. "Optimal Taxation in a Dynamic Model of Shirking and Unemployment: Shapiro and Stiglitz Meet Chamley," Carleton Economic Papers 07-07, Carleton University, Department of Economics, revised Aug 2010.
- Richard A. Brecher & Zhiqi Chen, 2010.
"Unemployment of Skilled and Unskilled Labor in an Open Economy: International Trade, Migration, and Outsourcing,"
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Wiley Blackwell, vol. 18(5), pages 990-1000, November.
- Richard Brecher & Zhiqi Chen, 2008. "Unemployment of Skilled and Unskilled Labor in an Open Economy: International Trade, Migration, and Outsourcing," Carleton Economic Papers 08-07, Carleton University, Department of Economics, revised Nov 2010.
- Howard Petith, 2005. "Capitalism, Unemployment and the Transition to the Contemporary Pattern of Growth," UFAE and IAE Working Papers 649.05, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
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