A Simple Model of Keynesian Unemployment
AbstractConstructing a general equilibrium model which compactly incorporates the markets for outputs, labor, money, and equities, we examine equilibrium unemployment. While a mechanism of an efficiency wage brings about nominal wage rigidity, unemployment occurring in our model definitely has Keynesian features. For instance, a reduction in wages rather enhances unemployment through a decrease in consumption. In addition, our paper shows a possibility of Pareto improvement through an increase in unemployment benefits.
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Bibliographic InfoPaper provided by EconWPA in its series Macroeconomics with number 0502024.
Length: 28 pages
Date of creation: 11 Feb 2005
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Note: Type of Document - pdf; pages: 28. a substantially improved version of ewp-mac/0404039
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Unemployment; Keynesian; Efficiency wages;
Other versions of this item:
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
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