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Capital accumulation, unemployment, and the putty-clay

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  • Javier Birchenall

    (Department of Economics. University of California, Santa Barbara)

Abstract

This note studies the dynamics of labor markets in a putty-clay framework. It analyzes the evolution of job creation and job destruction in an economy without market frictions. Unemployment and labor market flows emerge under putty-clay technologies because low productive jobs become unused factors. As capital accumulates, firms destruct low productive jobs by obsolescence. Simultaneously, the use of capital intensive technologies s new jobs by the low substitution between capital and labor.

Suggested Citation

  • Javier Birchenall, 2004. "Capital accumulation, unemployment, and the putty-clay," Economics Bulletin, AccessEcon, vol. 5(19), pages 1-8.
    • Handle: RePEc:ebl:ecbull:eb-04e20007
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    File URL: http://www.accessecon.com/pubs/EB/2004/Volume5/EB-04E20007A.pdf
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    References listed on IDEAS

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    Cited by:

    1. Ishise, Hirokazu, 2016. "Capital heterogeneity as a source of comparative advantage: Putty-clay technology in a ricardian model," Journal of International Economics, Elsevier, vol. 99(C), pages 223-236.

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    More about this item

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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