A SIMPLE MODEL OF KEYNESIAN UNEMPLOYMENT
This paper presents a general equilibrium model that extends a static New Keynesian framework to an overlapping generations model. The model shows multiple stationary states, one of which has the following strong Keynesian features: (1) a reduction in wages generates increased unemployment through a decrease in consumption, and (2) the fiscal multiplier is larger than unity and is increasing in the wage share in income. Copyright © 2009 The Author. Journal compilation © 2009 Blackwell Publishing Ltd.
Year of publication: |
2010
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Authors: | Nakajima, Tetsuya |
Published in: |
Metroeconomica. - Wiley Blackwell, ISSN 0026-1386. - Vol. 61.2010, 2, p. 239-256
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Publisher: |
Wiley Blackwell |
Saved in:
freely available
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