Aggregate demand deficiency, labor unions, and long‐run stagnation
Metroeconomica, 2018, vol. 69, issue 4, 868-888
Using a money‐in‐the‐utility‐function model, this paper considers long‐run stagnation where insatiable demand for money persistently creates aggregate demand deficiency and consequent unemployment in the presence of nominal wage stickiness attributed to union wage setting. In this long‐run stagnation, generous unemployment benefits reduce unemployment. Moreover, paradoxically, unemployment declines if labor unions give weight to nominal wage gains rather than employment increases.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:metroe:v:69:y:2018:i:4:p:868-888
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0026-1386
Access Statistics for this article
Metroeconomica is currently edited by Heinz D. Kurz and Neri Salvadori
More articles in Metroeconomica from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().