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Should We Wait to ‘Grow Out of’ Unemployment? The Implications of a Neoclassical Calibration Analysis

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  • WILLIAM COLEMAN

Abstract

The paper uses a Solow‐Ramsey growth model to evaluate the effectiveness of growth as a remedy for unemployment in the face of a wage minimum. Plausible calibration of the model suggests that the elimination of 5 per cent unemployment by the process of capital accumulation may take about 20 years.

Suggested Citation

  • William Coleman, 1998. "Should We Wait to ‘Grow Out of’ Unemployment? The Implications of a Neoclassical Calibration Analysis," The Economic Record, The Economic Society of Australia, vol. 74(225), pages 162-169, June.
    • Handle: RePEc:bla:ecorec:v:74:y:1998:i:225:p:162-169
    DOI: 10.1111/j.1475-4932.1998.tb01914.x
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    References listed on IDEAS

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    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    2. Robertson, P. E., 1997. "Transitional Growth Paths in Developing Economies," Papers 97/7, New South Wales - School of Economics.
    3. Hall, Robert E, 1988. "Intertemporal Substitution in Consumption," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 339-357, April.
    4. A. K. Dixit, 1968. "Optimal Development in the Labour-Surplus Economy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 35(1), pages 23-34.
    5. Ian M. McDonald, 1984. "Trying to Understand Stagflation," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 17(3), pages 32-56, November.
    6. Coleman, W, 1997. "Can We Grow Out of Unemployment? The Lessons of a Neoclassical Analysis," Papers 1997-01, Tasmania - Department of Economics.
    7. Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, April.
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    Cited by:

    1. Anh T. Le & Paul W. Miller, 2000. "Australia's Unemployment Problem," The Economic Record, The Economic Society of Australia, vol. 76(232), pages 74-104, March.

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