Unemployment and Capital Accumulation in Interwar Britain
The paper uses the Kalman filter method to estimate the time-varying NAIRU of interwar Britain and shows that, during the 1930s, the NAIRU drifted upwards by approximately four per cent. Also, the paper presents an imperfect competition model which predicts that, in the medium run, the NAIRU depends on labour market institutions, unanticipated total factor productivity growth and capital accumulation. Econometric evidence based on data from interwar Britain does not contradict this hypothesis. In particular, it supports the hypothesis that the rising trend of the NAIRU during the 1930s is partly due to a slowdown in capital accumulation demonstrating, thus, that adverse demand shocks may have long-lasting effects.
|Date of creation:||29 Sep 2003|
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References listed on IDEAS
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- Broadberry, S N, 1986. "Aggregate Supply in Interwar Britain," Economic Journal, Royal Economic Society, vol. 96(382), pages 467-81, June.
- Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005.
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Oxford University Press, number 9780199279173.
- Layard, Richard & Nickell, Stephen & Jackman, Richard, 1991. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780198284345.
- Bordo, Michael D. & Rockoff, Hugh, 1996.
"The Gold Standard as a “Good Housekeeping Seal of Approval”,"
The Journal of Economic History,
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- Michael D. Bordo, 1995. "The Gold Standard as a `Good Housekeeping Seal of Approval'," NBER Working Papers 5340, National Bureau of Economic Research, Inc.
- Hugh Rockoff & Michael D. Bordo, 1996. "The Gold Standard as a "Good Housekeeping Seal of Approval"," Departmental Working Papers 199528, Rutgers University, Department of Economics.
- Broadberry S. N. & Ritschl A., 1995. "Real Wages, Productivity, and Unemployment in Britain and Germany during the 1920's," Explorations in Economic History, Elsevier, vol. 32(3), pages 327-349, July.
- Boyer, George R. & Hatton, Timothy J., 2002.
"New Estimates Of British Unemployment, 1870 1913,"
The Journal of Economic History,
Cambridge University Press, vol. 62(03), pages 643-675, September.
- repec:cup:cbooks:9780521430333 is not listed on IDEAS
- Benjamin, Daniel K & Kochin, Levis A, 1979. "Searching for an Explanation of Unemployment in Interwar Britain," Journal of Political Economy, University of Chicago Press, vol. 87(3), pages 441-78, June.
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