Economics at your fingertips  

Dynamic Analysis of a Disequilibrium Macroeconomic Model with Dual Labor Markets

Shogo Ogawa

MPRA Paper from University Library of Munich, Germany

Abstract: We extend the general disequilibrium model of Malinvaud(1980) by using dual labor market theory. By considering two tiers of workers, we find that while the duality of the labor market expands an equilibrium regime in the short term, it does not always keep an equilibrium in the medium term. In the medium term, the business cycle converges toward a disequilibrium regime unless the goods market is potentially in equilibrium. Employment and wages at the steady state are affected by the size of the government, and the stability of wage bargaining is only a sufficient condition of the local stability of our dynamic system. Therefore, involuntary unemployment can be remedied only when goods demand is sufficiently large.

Keywords: Disequilibrium macroeconomics; Non-Walrasian analysis; Segmented labor markets; Business cycles (search for similar items in EconPapers)
JEL-codes: E12 E24 E32 J42 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-iue, nep-lma and nep-mac
Date: 2018-01-23
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link) original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Series data maintained by Joachim Winter ().

Page updated 2018-02-24
Handle: RePEc:pra:mprapa:84107