Capital accumulation, unemployment, and the putty-clay

Javier Birchenall

Economics Bulletin, 2004, vol. 5, issue 19, 1-8

Abstract: This note studies the dynamics of labor markets in a putty-clay framework. It analyzes the evolution of job creation and job destruction in an economy without market frictions. Unemployment and labor market flows emerge under putty-clay technologies because low productive jobs become unused factors. As capital accumulates, firms destruct low productive jobs by obsolescence. Simultaneously, the use of capital intensive technologies s new jobs by the low substitution between capital and labor.

JEL-codes: D9 E2 (search for similar items in EconPapers)
Date: 2004-11-06
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Citations: View citations in EconPapers (2)

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