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|Title:||Unemployment invariance |
Snower, Dennis J.
|Issue Date:||2002 |
|Series/Report no.:||Working paper series, Department of Economics, Queen Mary College, London 476|
|Abstract:||This paper provides a critique of the "unemployment invariance hypothesis", according to which the behavior of the labor market ensures that the long-run unemployment rate is independent of the size of the capital stock, productivity and the labor force. Using Solow growth and endogenous growth models, we show that the labor market alone need not contain all the equilibrating mechanisms to ensure unemployment invariance; in particular, other markets may perform part of the equilibrium process as well. By implication, policies that raise the growth path of capital or increase the effective working-age population may influence the long-run unemployment rate.|
|Subjects:||Unemployment , employment , wage determination , labor supply , capital accumulation , productivity , technological change , economic growth|
|Document Type:||Working Paper|
|Appears in Collections:||Working Paper Series, School of Economics and Finance, Queen Mary, University of London |
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