Learning of General Equilibrium Effects and the Unemployment Trap
AbstractWe examine wage bargaining when employers and labor unions do not always take all general equilibrium effects into account but learn a steady state. If agents do hardly consider general equilibrium effects, low real wages and low unemployment results. With an intermediate view, when partial equilibrium effects are taken into account, high real wages and unemployment results, which may explain the persistence of high unemployment in Europe. If all general equilibrium effects are incorporated at once, again low real wages and low unemployment results. We thus obtain a hump-shaped relationship between the extend of feedback effects incorporated by the bargaining parties and real wages or unemployment.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. 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.
Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 254.
Length: 35 pages
Date of creation: Feb 2001
Date of revision:
Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Find related papers by JEL classification:
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Gersbach, Hans & Schniewind, Achim, 2008.
"Imperfect competition, general equilibrium and unemployment,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 32(5), pages 1381-1398, May.
- Hans Gersbach & Achim Schniewind, 1999. "Imperfect Competition, General Equilibrium and Unemployment," CESifo Working Paper Series 224, CESifo Group Munich.
- Rainer Winkelmann, 2002.
"Why do firms recruit internationally? Result from the IZA International Employer Survey 2000,"
SOI - Working Papers
0202, Socioeconomic Institute - University of Zurich.
- Winkelmann, Rainer, 2001. "Why Do Firms Recruit Internationally? Results from the IZA International Employer Survey 2000," IZA Discussion Papers 331, Institute for the Study of Labor (IZA).
- Gersbach, Hans & Schniewind, Achim, 2001.
"Awareness of General Equilibrium Effects and Unemployment,"
IZA Discussion Papers
394, Institute for the Study of Labor (IZA).
- Gersbach, Hans & Schniewind, Achim, 2005. "Awareness of General Equilibrium Effects and Unemployment," CEPR Discussion Papers 5012, C.E.P.R. Discussion Papers.
- Saint-Paul, Gilles, 2004.
"Why are European Countries Diverging in their Unemployment Experience?,"
IDEI Working Papers
269, Institut d'Économie Industrielle (IDEI), Toulouse.
- Gilles Saint-Paul, 2004. "Why are European Countries Diverging in their Unemployment Experience?," Journal of Economic Perspectives, American Economic Association, vol. 18(4), pages 49-68, Fall.
- Saint-Paul, Gilles, 2004. "Why are European Countries Diverging in their Unemployment Experience?," CEPR Discussion Papers 4328, C.E.P.R. Discussion Papers.
- Saint-Paul, Gilles, 2004. "Why Are European Countries Diverging in Their Unemployment Experience?," IZA Discussion Papers 1066, Institute for the Study of Labor (IZA).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).
If references are entirely missing, you can add them using this form.