Involuntary unemployment as a Nash equilibrium and fiscal policy

Yasuhito Tanaka

MPRA Paper from University Library of Munich, Germany

Abstract: Using two types of overlapping generations (OLG) model, we show that involuntary unemployment is in a Nash equilibrium of a game with a firm and consumers, and we can achieve full-employment by fiscal policy financed by seignorage not tax. Once we achieve it, it is maintained without government expenditure. Also we show that a fall in the nominal wage rate may not decrease involuntary unemployment.

Keywords: Involuntary unemployment; Nash equilibrium; Fiscal policy (search for similar items in EconPapers)
JEL-codes: E12 E24 (search for similar items in EconPapers)
Date: 2020-07-26
New Economics Papers: this item is included in nep-dge, nep-gth and nep-mac
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Citations: View citations in EconPapers (2)

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