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Vicious and Virtuous Circles - The Political Economy of Unemployment in Interwar UK and USA Author info | Abstract | Publisher info | Download info | Related research | Statistics Matthews, Kent () (Cardiff Business School)
Minford, Patrick () (Cardiff Business School)
Naraidoo, Ruthira
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registered author(s):
This paper develops a political economy model of multiple unemployment equilibria to provide a theory of an endogenous natural rate of unemployment. This model is applied to the UK and the US interwar period which is remembered as the decade of mass unemployment. The theory here sees the natural rate and the associated path of unemployment as a reaction to shocks (mainly demand in nature) and the institutional structure of the economy. The channel through which these two forces feed on each other is a political economy process whereby voters with limited information on the natural rate react to shocks by demanding more or less social protection. The reduced form results obtained confirm a pattern of unemployment behaviour in which unemployment moves between high and low equilibria in response to shocks.
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Paper provided by Cardiff University, Cardiff Business School, Economics Section in its series Cardiff Economics Working Papers with number
E2006/25.
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Length: 33 pages
Date of creation: Jan 2006Date of revision:
Nov 2006Publication status: Forthcoming in European Journal of Political Economy Handle: RePEc:cdf:wpaper:2006/25Contact details of provider: Postal: Aberconway Building, Colum Drive, CARDIFF, CF10 3EU Phone: +44 (0) 29 20874417 Fax: +44 (0) 29 20874419 Web page: http://www.cardiff.ac.uk/carbs/econ/index.html More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Bruce Webb).
Keywords: Equilibrium unemployment political economy 'vicious' and 'virtuous' circles bootstrapping Other versions of this item:
Paper Matthews, Kent & Minford, Patrick & Naraidoo, Ruthira, 2006.
"Vicious and Virtuous Circles - The Political Economy of Unemployment in Interwar UK and USA ,"
Cardiff Economics Working Papers
E2006/7, Cardiff University, Cardiff Business School, Economics Section.
Matthews, Kent & Minford, Patrick & Naraidoo, Ruthira, 2008.
"Vicious and Virtuous Circles - The Political Economy of Unemployment in Interwar UK and USA ,"
CEPR Discussion Papers
6839, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Ruthira Naraidoo & Patrick Minford & Kent Matthews, 2006.
"Vicious and Virtuous Circles - the Political Economy of Unemployment in Interwar UK and USA ,"
Keele Economics Research Papers
KERP 2006/08, Centre for Economic Research, Keele University.
[Downloadable!] Find related papers by JEL classification: E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution E27 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
This paper has been announced in the following NEP Reports :
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