Koskela, Erkki; Stenbacka, Rune; Juselius, Mikael - In: Finnish Economic Papers 26 (2013) 2, pp. 72-94
We study the effects of labour market imperfections and the capital stock on equilibrium unemployment. With an … exogenous capital-labour ratio, stronger labour market imperfections promote equilibrium unemployment. However, the relationship … between the long-run unemployment and the capital stock is not monotonic. With sufficiently strong (weak) labour market …