Unemployment and Economic Growth Cycles
The purpose of this paper is to study the dynamic interaction between economic growth and unemployment in a general model of economic growth. Labour market disequilibrium is introduced through a non-market real wage clearing modeled by a non linear Phillips Curve. We show that unemployment rate and per capita income dynamics fluctuate along cycles of different periods, and they may even have aperiodic paths. Labour market characteristics are the endogenous source of instability. In particular, as the rigidity of the labour market increases, the possibility of irregular behaviour increases as well. Besides cyclical behaviour, the dynamic analysis points to a positive income growth trend sustained by knowledge accumulation; however, there are periods where per capita income decreases. Moreover, in the same line as wage bargaining models (Layard and Nickell, 1985, 1986), we get the result that the higher workers' bargaining power, the lower both employment rate and per capita production. The paper aims to complement the literature in understanding the origin and nature of fluctuations in economic growth models.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 12 (2008)
Issue (Month): 2 (May)
|Contact details of provider:|| Web page: https://www.degruyter.com|
|Order Information:||Web: https://www.degruyter.com/view/j/snde|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Luciano Fanati & Piero Manfredi, 2003. "Population, Unemployment and Economic Growth Cycles: A Further Explanatory Perspective," Metroeconomica, Wiley Blackwell, vol. 54(2-3), pages 179-207, May.
- Henin, Pierre-Yves & Michel, Philippe, 1982. "Harrodian and neoclassical paths in a constrained growth model," Economics Letters, Elsevier, vol. 10(3-4), pages 237-242.
- Ito, Takatoshi, 1980. "Disequilibrium growth theory," Journal of Economic Theory, Elsevier, vol. 23(3), pages 380-409, December.
- Robert J. Barro, 2013.
"Inflation and Economic Growth,"
Annals of Economics and Finance,
Society for AEF, vol. 14(1), pages 121-144, May.
- Robert J. Barro, 1995. "Inflation and Economic Growth," NBER Working Papers 5326, National Bureau of Economic Research, Inc.
- Robert J. Barro, 2012. "Inflation and Economic Growth," CEMA Working Papers 568, China Economics and Management Academy, Central University of Finance and Economics.
- Michael Kremer, 1993. "Population Growth and Technological Change: One Million B.C. to 1990," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 681-716.
- Peter Clark & Douglas Laxton & David Rose, 1996. "Asymmetry in the U.S. Output-Inflation Nexus," IMF Staff Papers, Palgrave Macmillan, vol. 43(1), pages 216-251, March.
- Lars Osberg & Zhengxi Lin, 2000. "How Much of Canada's Unemployment is Structural?," Canadian Public Policy, University of Toronto Press, vol. 26(s1), pages 141-157, July.
- Lin, Zhengxi & Osberg, Lars, 2000. "How Much of Canada's Unemployment Is Structural?," Analytical Studies Branch Research Paper Series 2000145e, Statistics Canada, Analytical Studies Branch.
- David Cass, 1965. "Optimum Growth in an Aggregative Model of Capital Accumulation," Review of Economic Studies, Oxford University Press, vol. 32(3), pages 233-240.
- H. Rose, 1967. "On the Non-Linear Theory of the Employment Cycle," Review of Economic Studies, Oxford University Press, vol. 34(2), pages 153-173.
- Nishimura, Kazuo, 1985. "Competitive equilibrium cycles," Journal of Economic Theory, Elsevier, vol. 35(2), pages 284-306, August.
- Benhabib, Jess & Nishimura, Kazuo, 1983. "Competitive Equilibrium Cycles," Working Papers 83-30, C.V. Starr Center for Applied Economics, New York University.
- Day, Richard H, 1982. "Irregular Growth Cycles," American Economic Review, American Economic Association, vol. 72(3), pages 406-414, June.
- Bean, Charles & Pissarides, Christopher, 1993. "Unemployment, consumption and growth," European Economic Review, Elsevier, vol. 37(4), pages 837-854, May.
- C Bean & Christopher A. Pissarides, 1992. "Unemployment, Consumption and Growth," CEP Discussion Papers dp0100, Centre for Economic Performance, LSE.
- Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 70(1), pages 65-94.
- David G. Blanchflower & Andrew J. Oswald, 1995. "An Introduction to the Wage Curve," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 153-167, Summer.
- Michele Boldrin & Raymond J. Deneckere, 1987. "Simple Macroeconomic Models With Very Complicated Dynamics," UCLA Economics Working Papers 527, UCLA Department of Economics.
- Deneckere, Raymond & Pelikan, Steve, 1986. "Competitive chaos," Journal of Economic Theory, Elsevier, vol. 40(1), pages 13-25, October.
- Henri L.F de Groot, 2000. "Growth, Unemployment and Deindustrialization," Books, Edward Elgar Publishing, number 1946.
- Chiarella, Carl & Flaschel, Peter, 1996. "Real and monetary cycles in models of Keynes-Wicksell type," Journal of Economic Behavior & Organization, Elsevier, vol. 30(3), pages 327-351, September.
- Xavier Sala-I-Martin, 1997. "Transfers, Social Safety Nets, and Economic Growth," IMF Staff Papers, Palgrave Macmillan, vol. 44(1), pages 81-102, March.
When requesting a correction, please mention this item's handle: RePEc:bpj:sndecm:v:12:y:2008:i:2:n:6. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.