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Is there a growth-unemployment trade-off?

Abstract:

Why might there be a long-run trade-off between growth and unemployment? In general equilibrium, the returns on the factors of production are interdependent. This paper develops a model where the determination of the wage is central to the evolution of these incentives. The incentive to hire responds little (and in some cases not at all) to changes in the rate of interest. If the wage grows in line with productivity, there is a positive relation between growth and unemployment. If the wage ri...

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Publication status:
Published

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Publisher:
University of Oxford Publisher's website
Series:
Department of Economics Discussion Paper Series
Publication date:
2001-01-01
Paper number:
62
Keywords:
Pubs id:
1144355
Local pid:
pubs:1144355
Deposit date:
2020-12-15

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