The Impossibility of "Involuntary Unemployment" in an Overlapping Generations Model with Rational Expectations

Christian Schultz ()

No 89-18, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: If there is unemployment no matter how low the wage rate becomes, one speaks of involuntary unemployment. This phenomenon has been shown to arise in a variety of temporary or atemporal macro models with imperfect competition in the goods markets. In this paper, the author investigates whether the phenomenon of involuntary unemployment arises in an overlapping generations model with rational expectations. It does not, neither in the short nor in the long run.

Keywords: labor economics; employment studies; general equilibrium and disequilibrium theory (search for similar items in EconPapers)
JEL-codes: D51 D84 E24 (search for similar items in EconPapers)
Pages: 18 pages
Date: 1989-03, Revised 1989-10
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Published in: Journal of Economic Theory, 1992, 58(1) pp 61-76

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Journal Article: The impossibility of involuntary unemployment in an overlapping generations model with rational expectations (1992)
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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:8918

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