Unemployment out of nowhere
Unemployment is usually explained with reference to the equilibrium of supply and demand in the labour market. This approach rests on specific behavioral assumptions that are formally expressed as axioms. The standard set of axioms is replaced in the present paper by a set of structural axioms. This approach yields the objective determinants of employment. They consist of effective demand, the actual outcome of price formation, structural stress as determined by the heterogeneity within the business sector and the income distribution. Sudden changes of employment are effected by latent relative switchers that are hard to spot empirically.
|Date of creation:||14 Jul 2011|
|Date of revision:||15 Jul 2011|
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- Kakarot-Handtke, Egmont, 2011.
"Keynes’s missing axioms,"
31179, University Library of Munich, Germany.
- Hausman,Daniel M., 1992. "The Inexact and Separate Science of Economics," Cambridge Books, Cambridge University Press, number 9780521425230, November.
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"Causality in Macroeconomics,"
Cambridge University Press, number 9780521002882, November.
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- Axel Leijonhufvud, 2009. "Out of the corridor: Keynes and the crisis," Cambridge Journal of Economics, Oxford University Press, vol. 33(4), pages 741-757, July.
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