Aggregate Demand, Economic Growth, and Unemployment

Martin Zagler ()

Economics Working Papers from European University Institute

Abstract: This paper argues that in a growing economy unemployment can be the cause of goods markets failures, even if these are purely transitory. As the economy grows, new firms wish to enter products are accepted on the market, which we model as a purely transitory demand shock. It may take some time, however, until their products are accepted on the market, which we model as a purely transitory demand shock.

Keywords: DEMAND; UNEMPLOYMENT; ECONOMIC GROWTH (search for similar items in EconPapers)
JEL-codes: E24 O41 (search for similar items in EconPapers)
Date: 2000
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Persistent link: http://EconPapers.repec.org/RePEc:eui:euiwps:eco2000/17

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