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Should We Wait to ‘Grow Out of’ Unemployment? The Implications of a Neoclassical Calibration Analysis

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  • WILLIAM COLEMAN

Abstract

The paper uses a Solow‐Ramsey growth model to evaluate the effectiveness of growth as a remedy for unemployment in the face of a wage minimum. Plausible calibration of the model suggests that the elimination of 5 per cent unemployment by the process of capital accumulation may take about 20 years.

Suggested Citation

  • William Coleman, 1998. "Should We Wait to ‘Grow Out of’ Unemployment? The Implications of a Neoclassical Calibration Analysis," The Economic Record, The Economic Society of Australia, vol. 74(225), pages 162-169, June.
    • Handle: RePEc:bla:ecorec:v:74:y:1998:i:225:p:162-169
    DOI: 10.1111/j.1475-4932.1998.tb01914.x
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    References listed on IDEAS

    as
    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    2. Robertson, P. E., 1997. "Transitional Growth Paths in Developing Economies," Papers 97/7, New South Wales - School of Economics.
    3. Ian M. McDonald, 1984. "Trying to Understand Stagflation," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 17(3), pages 32-56, November.
    4. A. K. Dixit, 1968. "Optimal Development in the Labour-Surplus Economy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 35(1), pages 23-34.
    5. Coleman, W, 1997. "Can We Grow Out of Unemployment? The Lessons of a Neoclassical Analysis," Papers 1997-01, Tasmania - Department of Economics.
    6. Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, December.
    7. Hall, Robert E, 1988. "Intertemporal Substitution in Consumption," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 339-357, April.
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    Cited by:

    1. Anh T. Le & Paul W. Miller, 2000. "Australia's Unemployment Problem," The Economic Record, The Economic Society of Australia, vol. 76(232), pages 74-104, March.

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