Unemployment, capital accumulation and labour market institutions in the Great Recession

Engelbert Stockhammer, Alexander Guschanski and Karsten Kohler

No PKWP1406, Working Papers from Post Keynesian Economics Society (PKES)

Abstract: The paper restates the post-Keynesian view of unemployment within a NAIRU framework. In the short run the private effective labour demand need not be downward sloping because of debt deflation and wage-led demand regimes. In the medium run the NAIRU will be endogenous because of the social norm character of wage setting and the supply-side effects of capital accumulation. Capital investment rather than labour market institutions is the crucial variable that explains changes in unemployment performance. We provide econometric evidence that the post-Keynesian view holds up well in the recession following the crisis 2008.

Keywords: Unemployment; NAIRU; Post Keynesian economics; panel analysis (search for similar items in EconPapers)
JEL-codes: E12 E24 E25 (search for similar items in EconPapers)
Pages: 30
Date: 2014-05
New Economics Papers: this item is included in nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Journal Article: Unemployment, capital accumulation and labour market institutions in the Great Recession (2014)
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