ISBN:
0444878572
Content:
This chapter discusses facts and theories related to cyclic fluctuations in the labor market. Employment in the United States shows important cyclical fluctuations, both in the amount of work performed by workers on their jobs and in the fraction of the population holding jobs. Macro and labor economists have been interested in explaining these fluctuations for many years. The microeconomic criticism of the standard Keynesian view of employment determination has sharpened and improved that view. The Keynesian analysis posits that firms choose employment unilaterally subjected to a predetermined wage. Because the choice does not take account of the marginal value of workers' time, the employment level may be inefficient. It is precisely the monumental inefficiency of widespread unemployment during cyclical contraction that makes Keynesians call for corrective government action. The equilibrium models of employment fluctuations provide the most serious intellectual competition to the standard macro model today. Two versions are under active development. One invokes cyclical changes in product demand, which bring changes in real interest rates to clear the output market. A second version of the equilibrium model notes that the movement of workers from one sector to another takes time and resources.
In:
Handbook of labor economics, Amsterdam : North-Holland, 1986, (1986), Seite 1001-1035, 0444878572
In:
9780444878571
In:
year:1986
In:
pages:1001-1035
Language:
English
DOI:
10.1016/S1573-4463(86)02007-2
URL:
Volltext
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