Arbeitspapier
The impact of growth on unemployment in a low vs. a high inflation environment
The standard search model of unemployment predicts, under realistic assumptions about household preferences, that disembodied technological progress leads to higher steady-state unemployment. This prediction is at odds with the 1970s experience of slow productivity growth and high unemployment in industrial countries. We show that introducing nominal price rigidity helps in reconciling the model's prediction with experience. Faster growth is shown to lead to lower unemployment when inflation is relatively high, as was the case in the 1970s. In general, the sign of the effect of growth on unemployment is shown to depend on the level of steady-state inflation. There is a threshold level of inflation below (above) which faster growth leads to higher (lower) unemployment. The prediction of the model is supported by an empirical analysis based on US and European data.
- Sprache
-
Englisch
- Erschienen in
-
Series: Economics Working Paper ; No. 2017-01
- Klassifikation
-
Wirtschaft
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Price Level; Inflation; Deflation
- Thema
-
growth
trend inflation
unemployment
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Tesfaselassie, Mewael F.
Wolters, Maik H.
- Ereignis
-
Veröffentlichung
- (wer)
-
Kiel University, Department of Economics
- (wo)
-
Kiel
- (wann)
-
2017
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:41 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Tesfaselassie, Mewael F.
- Wolters, Maik H.
- Kiel University, Department of Economics
Entstanden
- 2017
Ähnliche Objekte (12)
The impact of growth on unemployment in a low vs. a high inflation environment
The impact of growth on unemployment in a low vs. a high inflation environment
Inflation and unemployment revisited: grease vs. sand
Inflation and unemployment revisited: Grease vs. sand
Inflation, Unemployment and Unemployment Benefits
Unemployment and Inflation Regimes
Macroeconomic Perspectives on Inflation and Unemployment
Unemployment, Inflation and the Job Structure
Unemployment and inflation in economic crises
Japan's Low Inflation Conundrum
When low interest rates cause low inflation
Sequential Information Flow and Real-Time Diagnosis of Swiss Inflation: Intra-Monthly DCF Estimates for a Low-Inflation Environment
The impact of growth on unemployment in a low vs. a high inflation environment
The impact of growth on unemployment in a low vs. a high inflation environment
Inflation and unemployment revisited: grease vs. sand
Inflation and unemployment revisited: Grease vs. sand
Inflation, Unemployment and Unemployment Benefits
Unemployment and Inflation Regimes
Macroeconomic Perspectives on Inflation and Unemployment
Unemployment, Inflation and the Job Structure
Unemployment and inflation in economic crises
Japan's Low Inflation Conundrum
When low interest rates cause low inflation
Sequential Information Flow and Real-Time Diagnosis of Swiss Inflation: Intra-Monthly DCF Estimates for a Low-Inflation Environment
The impact of growth on unemployment in a low vs. a high inflation environment
The impact of growth on unemployment in a low vs. a high inflation environment
Inflation and unemployment revisited: grease vs. sand
Inflation and unemployment revisited: Grease vs. sand
Inflation, Unemployment and Unemployment Benefits
Unemployment and Inflation Regimes
Macroeconomic Perspectives on Inflation and Unemployment
Unemployment, Inflation and the Job Structure
Unemployment and inflation in economic crises
Japan's Low Inflation Conundrum
When low interest rates cause low inflation