A SIMPLE MODEL OF KEYNESIAN UNEMPLOYMENT
Tetsuya Nakajima ()
Metroeconomica, 2010, vol. 61, issue 2, 239-256
This paper presents a general equilibrium model that extends a static New Keynesian framework to an overlapping generations model. The model shows multiple stationary states, one of which has the following strong Keynesian features: (1) a reduction in wages generates increased unemployment through a decrease in consumption, and (2) the fiscal multiplier is larger than unity and is increasing in the wage share in income. Copyright © 2009 The Author. Journal compilation © 2009 Blackwell Publishing Ltd.
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Working Paper: A Simple Model of Keynesian Unemployment (2005)
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