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Equilibrium unemployment theory Christopher A. Pissarides
Publisher: MIT

Equilibrium Unemployment Theory, 2nd edition,. Wage rigidity is thus introduced as an ad hoc assumption to explain how an unemployment “equilibrium” is possible. This paper develops a political economy model of multiple unemployment equilibria to provide a theory of an endogenous natural rate of unemployment. [40] Pissarides, Christopher A. As the following diagram shows, labor-market-tightness is highly procyclical. An equilibrium theory of unemployment assumes that firms and employees increase their payoffs below rational expectations and that wages are decided to exploit the private gains from trade. [41] Pissarides, Christopher A. O seu livro “Equilibrium Unemployment Theory” é também uma referência na literatura macroeconómica do desemprego. In some cases, the theory is explicit. General-equilibrium models for studying monetary influences in general and the zero lower bound on the nominal interest rate in particular contain implicit theories of unemployment. The v/u ratio plays a prominent role equilibrium unemployment theory; see Diamond, Mortensen and Pissarides. This text, written with the graduate student in mind, analyzes the aggregate demand and aggregate supply for the open economy both in the short-term and in the long-term.