Involuntary Unemployment in Imperfectly Competitive General Equilibrium Models
AbstractThis paper is about involuntary unemployment in general equilibrium models with imperfect competition. It surveys papers written after the seminal work of d'Aspremont, Dos Santos Ferreira and Gérard-Varet (1984). This unemployment is called involuntary because it exists at any wage. It results from imperfect competition in the product markets, more specifically from firms' excessive market power. These papers have focussed their attention on the required conditions for involuntary unemployment. In our presentation, we characterise this form of unemployment through three elements: consumers' preferences, price expectations and Ford effects. Each element is important because it influences the demand for the good and hence its price elasticity, the latter being central in the definition of firms' market power.
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Bibliographic InfoPaper provided by Centre for Research into Industry, Enterprise, Finance and the Firm in its series CRIEFF Discussion Papers with number 0008.
Date of creation: Feb 2000
Date of revision:
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competition; preferences; price-elasticity; unemployment;
Other versions of this item:
- 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.
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
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