Wage flexibility and economic stability in a non-Walrasian model of economic growth

Hiroki Murakami ()

Structural Change and Economic Dynamics, 2015, vol. 32, issue C, 25-41

Abstract: In this paper, we set up a model of economic growth which deals with Keynesian unemployment, from non-Walrasian/Keynesian perspectives, investigate the possibility of persistent “growth cycles” generated and analyze the effects of flexibility of (real) wages on the long-run economic stability. Consequently, we reach the conclusion that flexibility of wages has an adverse effect on the macroeconomic stability and that reductions of wages have negative impacts on the attainment of “full-employment.”

Keywords: Economic stability; Growth cycles; Non-Walrasian analysis; Wage flexibility (search for similar items in EconPapers)
JEL-codes: E12 E21 E22 E23 E24 E31 E32 O40 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:32:y:2015:i:c:p:25-41

DOI: 10.1016/j.strueco.2015.01.002

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