Why Does Unemployment Persist? (1989)

Charles Bean

Chapter 9 in Tackling Unemployment, 1999, pp 231-256 from Palgrave Macmillan

Abstract: Abstract Macroeconomics was invented to explain the persistence of unemployment. In thinking about this issue there are three key facts to be accounted for. Fact 1 is persistence itself: if unemployment becomes unusually high, it does not quickly revert to its earlier level, and the same is true if it becomes abnormally low. This is true in all countries and is illustrated for Britain in Figure 9.1. As the figure shows, the history of unemployment, consists of some minor wiggles plus occasional major changes of level. The main movements of unemployment do not correspond to business cycle fluctuations which correct themselves within a few years.1

Keywords: Real Wage; Median Voter; Wage Equation; Supply Shock; Efficiency Wage (search for similar items in EconPapers)
Date: 1999
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DOI: 10.1057/9780230379206_9

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