IDEAS home Printed from
   My bibliography  Save this paper

Long-term unemployment, technical progress and capital mobility in an open growth-matching model


  • Birk, Angela


How does technical progress affect long-term unemployment in a small open economy? This relationship is evaluated in an open neoclassical growth model that is extended by a Pissarides-style labor market matching approach. In the general equilibrium model, the labor market of the three factor growth model is characterized by immobile heterogeneous jobless workers. International capital mobility represents the efficient intertemporal allocation of world resources. Depending on a parametric growth condition, an increase in technical progress implies a favorable capitalization effect respectively an unfavorable Schumpeterian creative destruction effect. Secondary effects in form of a stigmatization and a human capital depreciation effect are generated and influence the unemployment duration and the fraction of long-term unemployment negatively. Additionally, the model shows that even in the steady state a constant current account deficit for a net debtor is sustained that rises even more as productivity growth increases.

Suggested Citation

  • Birk, Angela, 2002. "Long-term unemployment, technical progress and capital mobility in an open growth-matching model," HWWA Discussion Papers 171, Hamburg Institute of International Economics (HWWA).
  • Handle: RePEc:zbw:hwwadp:26206

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item


    long-term unemployment; technical progress; capital mobility; growth;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:hwwadp:26206. 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: (ZBW - German National Library of Economics). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.