The Impossibility of "Involuntary Unemployment" in an Overlapping Generations Model with Rational Expectations
AbstractIf there is unemployment no matter how low the wage rate becomes, one speaks of involuntary unemployment. This phenomenon has been shown to arise in a variety of temporary or atemporal macro models with imperfect competition in the goods markets. In this paper, the author investigates whether the phenomenon of involuntary unemployment arises in an overlapping generations model with rational expectations. It does not, neither in the short nor in the long run.
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Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number 89-18.
Length: 18 pages
Date of creation: Mar 1989
Date of revision: Oct 1989
Publication status: Published in: Journal of Economic Theory, 1992, 58(1) pp 61-76
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labor economics; employment studies; general equilibrium and disequilibrium theory;
Other versions of this item:
- Schultz, Christian, 1992. "The impossibility of involuntary unemployment in an overlapping generations model with rational expectations," Journal of Economic Theory, Elsevier, vol. 58(1), pages 61-76, October.
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
- D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
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- Kaas, Leo & Madden, Paul, 2004. "Non-existence of market-clearing wages when the output market is imperfectly competitive," Economics Letters, Elsevier, vol. 84(2), pages 175-182, August.
- Laurence Lasselle & Serge Svizzero, 1998. "Involuntary Unemployment and Income Feedback Effects," CRIEFF Discussion Papers 9823, Centre for Research into Industry, Enterprise, Finance and the Firm.
- Kaas, Leo, 1998. "Multiplicity of Cournot Equilibria and Involuntary Unemployment," Journal of Economic Theory, Elsevier, vol. 80(2), pages 332-349, June.
- Kaas, Leo & Madden, Paul, 2005.
"Imperfectly competitive cycles with Keynesian and Walrasian features,"
European Economic Review,
Elsevier, vol. 49(4), pages 861-886, May.
- Kaas, Leo & Madden, Paul, 2000. "Imperfectly Competitive Cycles with Keynesian and Walrasian Features," Economics Series 83, Institute for Advanced Studies.
- L Kaas & P Madden, 2002. "Imperfectly Competitive Cycles with Keynesian and Walrasian Features," Centre for Growth and Business Cycle Research Discussion Paper Series 20, Economics, The Univeristy of Manchester.
- L Kaas & P Madden, 2002. "Imperfectly Competitive Cycles with Keynesian and Walrasian Features," The School of Economics Discussion Paper Series 0211, Economics, The University of Manchester.
- Laurence Lasselle & Serge Svizzero, 2000.
"Involuntary Unemployment in Imperfectly Competitive General Equilibrium Models,"
CRIEFF Discussion Papers
0008, Centre for Research into Industry, Enterprise, Finance and the Firm.
- Lasselle, Laurence S & Svizzero, Serge A, 2002. " Involuntary Unemployment in Imperfectly Competitive General Equilibrium Models," Journal of Economic Surveys, Wiley Blackwell, vol. 16(4), pages 487-507, September.
- Laurence Lasselle & Serge Svizzero, 2000. "On The Existence of A Cournot Equilibrium With Endogenous Income," CRIEFF Discussion Papers 0012, Centre for Research into Industry, Enterprise, Finance and the Firm.
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