Working paper
Natural rate of unemployment and efficiency: a dynamic analysis with flexible prices and increasing returns
- Abstract:
-
We present a continous time non tatonnement process for frictionless and perfectly competitive markets with (possibly non convex) production, where the natural rate of unemployment (NRU) emerges as the asymptotic value of unemployment. Consumers and producers are myopic and repeatedly participate in Mertens' (2003) limit-price mechanism. We show that underemployment and unsold inventories can survive along the solution paths of our dynamics - the hallmark of the failure of Say's law. The f...
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- Publication status:
- Published
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Bibliographic Details
- Publisher:
- University of Oxford Publisher's website
- Series:
- Department of Economics Discussion Paper Series
- Publication date:
- 2008-01-01
- Paper number:
- 2008fe02
Item Description
- Keywords:
- Pubs id:
-
1144051
- Local pid:
- pubs:1144051
- Deposit date:
- 2020-12-15
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- Copyright date:
- 2008
- Rights statement:
- Copyright 2008 The Author(s)
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