Uneven Technical Progress and Unemployment
AbstractIn a two-sector model with real wage rigidity, we examine how technical progress in one sector affects unemployment in the whole economy. We show that aggregate unemployment decreases for uneven technical change in the case of Cobb-Douglas production functions. For every type of technical progress, however, there are also elasticities of substitution in production and utility functions leading to a rise in unemployment. Moreover, we identify polar cases when unemployment strongly decreases.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 478.
Length: 25 pages
Date of creation: Apr 2002
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Find related papers by JEL classification:
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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- NEP-ALL-2002-05-03 (All new papers)
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