Equilibrium Unemployment and Investment Under Product and Labour Market Imperfections

Arbeitspapier

We study the implications of product market competition and investment for price setting, wage bargaining and thereby for equilibrium unemployment in an economy with product and labour market imperfections. We show that intensified product market competition will reduce equilibrium unemployment, whereas the effect of increased capital intensity is more complex. Higher capital intensity will decrease the equilibrium unemployment when the elasticity of substitution between capital and labour is less than one, while the reverse happens when this elasticity is higher than one but smaller than the elasticity of substitution between products. Finally, we demonstrate how labour and product market imperfections, characterized by the wage and price setting mark-ups, affect the optimal capital stock. Our findings raise important questions for future empirical research.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 1058

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Investment; Capital; Intangible Capital; Capacity ; Trade Unions: Objectives, Structure, and Effects ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Production, Pricing, and Market Structure; Size Distribution of Firms
• Thema: equilibrium unemployment ; product market imperfections ; investment ; wage bargaining ; Arbeitslosigkeit ; Arbeitsmarkttheorie ; Unvollkommener Markt ; Wettbewerb ; Investition ; Lohnverhandlungstheorie ; Kapitalintensität ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Kauppi, Heikki ; Koskela, Erkki ; Stenbacka, Rune
• Ereignis: Veröffentlichung
• (wer): Institute for the Study of Labor (IZA)
• (wo): Bonn
• (wann): 2004

Weitere Informationen

• Handle: http://hdl.handle.net/10419/20293
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ