whereby unemployment affects investment and growth. The model generates a growth unemployment rate trade-off. A reduced … propensity to save raises growth but it also raises the unemployment rate because of induced technological progress. This … unemployment affects income distribution; introduction of a Phillips curve and inflation effects; and introduction of demand growth …

I construct and analyze a growth model in which technical change can increase unemployment. I first analyze the forces … that deliver a constant steady state unemployment rate in this setting. Labor-saving technical change increases … unemployment, which lowers wages and creates incentives for future investment in labor-using technologies. In the long run, this …