Unemployment Equilibria and Input Prices: Theory and Evidence from the United States
AbstractThe paper develops an efficiency-wage model where input prices affect the equlibrium rate of unemployment. We show that a simple framework based on only two prices (the real price of oil and the real rate of interest) is able to explain the main post-war movements in the rate of U.S. joblessnss. The equations do well in forecasting unemployment many out-of-sample, and provide evidence that the oil price spike associated with Iraq's invasion of Kuweit appears to be a component of the "mystery" recession which followed.
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Bibliographic InfoPaper provided by Centre for Economic Performance & Institute of Economics in its series Papers with number 22.
Length: 20 pages
Date of creation: 1997
Date of revision:
Contact details of provider:
Postal: United Kingdom; Centre for Economic Performance & Institute of Economics and Statistics, Oxford University. Manor Road. Oxford OX1 3Ul
Web page: http://www.economics.ox.ac.uk/
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Other versions of this item:
- Alan A. Carruth & Mark A. Hooker & Andrew J. Oswald, 1998. "Unemployment Equilibria And Input Prices: Theory And Evidence From The United States," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 621-628, November.
- Carruth, A.A. & Hooker, M.A. & Oswald, A.J., 1998. "Unemployment Equilibria and Input Prices: Theory and Evidence from the United States," The Warwick Economics Research Paper Series (TWERPS) 496, University of Warwick, Department of Economics.
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
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