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Involuntary unemployment with indivisible labor supply under perfect competition

Author

Listed:
  • Yasuhito Tanaka

    (Faculty of Economics, Doshisha University, Japan)

Abstract

We show the existence of involuntary unemployment without the assumption of wage rigidity under perfect competition with indivisible labor supply and decreasing or constant returns to scale technology. We derive involuntary unemployment by considering consumers' utility maximization and firms' marginal cost pricing behavior using an overlapping generations model with three generations including childhood generation.

Suggested Citation

  • Yasuhito Tanaka, 2020. "Involuntary unemployment with indivisible labor supply under perfect competition," Economics Bulletin, AccessEcon, vol. 40(3), pages 1914-1923.
    • Handle: RePEc:ebl:ecbull:eb-20-00019
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    File URL: http://www.accessecon.com/Pubs/EB/2020/Volume40/EB-20-V40-I3-P165.pdf
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    References listed on IDEAS

    as
    1. Marc Lavoie, 2001. "Efficiency Wages in Kaleckian Models of Employment," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 23(3), pages 449-464, March.
    2. Hansen, Gary D., 1985. "Indivisible labor and the business cycle," Journal of Monetary Economics, Elsevier, vol. 16(3), pages 309-327, November.
    3. Masayuki Otaki, 2016. "Keynes’s General Theory Reconsidered in the Context of the Japanese Economy," SpringerBriefs in Economics, Springer, number 978-4-431-55915-3, October.
    4. Otaki, Masayuki, 2009. "A welfare economics foundation for the full-employment policy," Economics Letters, Elsevier, vol. 102(1), pages 1-3, January.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Tanaka, Yasuhito, 2020. "Involuntary unemployment as a Nash equilibrium and fiscal policy," MPRA Paper 102049, University Library of Munich, Germany.
    2. Tanaka, Yasuhito, 2021. "Budget Deficit to Achieve and Maintain Full-employment Under Growth by Technological Progress," MPRA Paper 107220, University Library of Munich, Germany.
    3. Tanaka, Yasuhito, 2020. "Fiscal policy under involuntary unemployment," MPRA Paper 102507, University Library of Munich, Germany.
    4. Yasuhito Tanaka, 2021. "An Elementary Mathematical Model for MMT (Modern Monetary Theory)," Research in Applied Economics, Macrothink Institute, vol. 13(3), pages 1-20, September.
    5. Yasuhito Tanaka, 2020. "Involuntary unemployment in overlapping generations model due to instability of the economy," Papers 2012.12199, arXiv.org.
    6. Tanaka Yasuhito, 2022. "Necessity of Budget Deficit Under Economic Growth in Monopolistic Competition," Economics and Business, Sciendo, vol. 36(1), pages 1-16, January.
    7. Tanaka, Yasuhito, 2021. "Involuntary unemployment in overlapping generations model due to instability of the economy and fiscal policy for full-employment," MPRA Paper 106214, University Library of Munich, Germany.
    8. Tanaka, Yasuhito, 2021. "A game-theoretic analysis of fiscal policy under economic growth from the perspective of MMT," MPRA Paper 107402, University Library of Munich, Germany.
    9. Tanaka, Yasuhito, 2021. "Technical progress and involuntary unemployment under deflation with real balance effect and fiscal policy for full-employment," MPRA Paper 106714, University Library of Munich, Germany.
    10. Tanaka, Yasuhito, 2022. "Budget deficit in a growing monetary economy: ver. 2," MPRA Paper 115631, University Library of Munich, Germany.
    11. Tanaka, Yasuhito, 2021. "Budget deficit for full-employment under growth and inflation by excessive deficit in an OLG model with bequest motive," MPRA Paper 107218, University Library of Munich, Germany.

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    1. Tanaka, Yasuhito, 2020. "Fiscal policy under involuntary unemployment," MPRA Paper 102507, University Library of Munich, Germany.
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    14. Tanaka, Yasuhito, 2019. "Involuntary unemployment under indivisible labor supply: Perfect competition case," MPRA Paper 97832, University Library of Munich, Germany.
    15. Tanaka, Yasuhito, 2020. "Involuntary unemployment as a Nash equilibrium and fiscal policy," MPRA Paper 102049, University Library of Munich, Germany.
    16. Tanaka, Yasuhito, 2020. "Divisibility and indivisibility of labor supply, and involuntary unemployment: A monopolistic competition model with homothetic preferences," MPRA Paper 98406, University Library of Munich, Germany.
    17. Tanaka, Yasuhito, 2020. "非自発的失業の存在について：世代重複完全競争モデルを用いて [On the existence of involuntary unemployment: Overlapping generations perfect competition model]," MPRA Paper 98407, University Library of Munich, Germany.
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    20. Jochen Mankart & Rigas Oikonomou, 2017. "Household Search and the Aggregate Labour Market," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(4), pages 1735-1788.

    More about this item

    Keywords

    involuntary unemployment; indivisible labor supply; perfect competition.;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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