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The pausing view of unemployment

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  • Vipin P. Veetil

    (Indian Institute of Technology Madras)

Abstract

This paper develops a theory of business cycle unemployment based on the idea that the economy may temporarily pause in response to heightened uncertainty. The pausing of actions in some quarters of the economy eases decision-making in other quarters, thereby leading the way to recovery. Both the heightening of uncertainty and the ‘pausing phenomena’ emerge from the interaction between firms with inter-related plans in a high-dimensional system. Unemployment therefore is an emergent phenomena and occurs without the imposition of sticky wages or appropriability problems at the micro level.

Suggested Citation

  • Vipin P. Veetil, 2021. "The pausing view of unemployment," Evolutionary and Institutional Economics Review, Springer, vol. 18(2), pages 435-446, September.
    • Handle: RePEc:spr:eaiere:v:18:y:2021:i:2:d:10.1007_s40844-021-00221-5
    DOI: 10.1007/s40844-021-00221-5
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    More about this item

    Keywords

    Unemployment; Schumpeter; Innovation; Adaptation; Disequilibrium;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General

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