A Neoclassical Model of Unemployment and the Business Cycle
James Hamilton ()
Journal of Political Economy, 1988, vol. 96, issue 3, pages 593-617
This paper investigates a general equilibrium model of unemployment and the business cycle in which specialization of labor plays a key role. A rational expectations equilibrium with ful ly flexible wages and prices can exhibit unemployment in which the ma rginal product of employed workers exceeds the reservation wage of th ose who are without jobs. Workers are unemployed either because they are in the process of relocating for a better job or because they are waiting for conditions in the depressed sector to improve. Moreover, seemingly small disruptions in the supplies of primary commodities s uch as energy could be the source of fluctuations in aggregate employ ment and can exert surprisingly large effects on real output. Copyright 1988 by University of Chicago Press.
References: Add references at CitEc
Citations View citations in EconPapers (156) Track citations by RSS feed
Downloads: (external link)
http://dx.doi.org/10.1086/261553 full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:ucp:jpolec:v:96:y:1988:i:3:p:593-617
Access Statistics for this article
Journal of Political Economy is currently edited by June
More articles in Journal of Political Economy from University of Chicago Press
Series data maintained by Journals Division ().