Arbeitspapier
Vicious and virtuous circle: The political economy of unemployment in interwar UK and USA
This paper develops a political economy model of multiple unemployment equilibria to provide a theory of an endogenous natural rate of unemployment. This model is applied to the UK and the US interwar period which is remembered as the decade of mass unemployment. The theory here sees the natural rate and the associated path of unemployment as a reaction to shocks (mainly demand in nature) and the institutional structure of the economy. The channel through which these two forces feed on each other is a political economy process whereby voters with limited information on the natural rate react to shocks by demanding more or less social protection. The reduced form results obtained con?rm a pattern of unemployment behaviour in which unemployment moves between high and low equilibria in response to shocks.
- Language
-
Englisch
- Bibliographic citation
-
Series: Cardiff Economics Working Papers ; No. E2006/25
- Classification
-
Wirtschaft
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Macroeconomics: Consumption, Saving, Production, Employment, and Investment: Forecasting and Simulation: Models and Applications
Capitalist Systems: Political Economy
- Subject
-
Equilibrium unemployment
political economy
“vicious” and “virtuous” circles
bootstrapping
forecasting
- Event
-
Geistige Schöpfung
- (who)
-
Matthews, Ken
Minford, Patrick
Naraidoo, Ruthira
- Event
-
Veröffentlichung
- (who)
-
Cardiff University, Cardiff Business School
- (where)
-
Cardiff
- (when)
-
2006
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Matthews, Ken
- Minford, Patrick
- Naraidoo, Ruthira
- Cardiff University, Cardiff Business School
Time of origin
- 2006
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