Existence of Involuntary Unemployment: the Role of Expectations and Feedback Effects

Laurence Lasselle and S. Svizzero

G.R.E.Q.A.M. from Universite Aix-Marseille III

Abstract: We investigate the existence conditions of involuntary unemployment in an overlapping generations model with an imperfect output market. At the temporary equilibrium, unemployment is involuntary if it exists whatever the nominal wage. The study of the price-elasticity components gives us two results. Firstly, under backward-looking expectations, it may always appear whatever feedback effects. Secondly, under rational expectations, it may only exist as soon as firms incorporate (even partly) profit feedback effects.

Keywords: UNEMPLOYMENT; EXPECTATIONS (search for similar items in EconPapers)
JEL-codes: D43 E24 (search for similar items in EconPapers)
Pages: 18 pages
Date: 1996
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Existence of Involuntary Unemployment: the Role of Expectations and Feedback Effects (1996)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fth:aixmeq:96a30

Access Statistics for this paper

More papers in G.R.E.Q.A.M. from Universite Aix-Marseille III G.R.E.Q.A.M., (GROUPE DE RECHERCHE EN ECONOMIE QUANTITATIVE D'AIX MARSEILLE), CENTRE DE VIEILLE CHARITE, 2 RUE DE LA CHARITE, 13002 MARSEILLE.. Contact information at EDIRC.
Bibliographic data for series maintained by Thomas Krichel ().