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Wage Regimes, Accumulation and Finance Constraints : Keynesian Unemployment Revisited

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  • Francesco Saraceno

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

This paper presents a sequential model suited to analyze transitions between equilibria. Disequilibrium dynamics are obtained from a standard monopolistic competition model, by introducing a sequential structure and reasonable hypotheses about technology, finance constraints, expectation formation, and the wage setting mechanism. The response to shocks crucially depends on the institutional features of the economy, and on the monetary policy stance. In particular, some degree of wage stickiness proves necessary to avoid explosive paths. This feature of the model makes it a good candidate for the reappraisal of Keynes' arguments on wages and unemployment.

Suggested Citation

  • Francesco Saraceno, 2004. "Wage Regimes, Accumulation and Finance Constraints : Keynesian Unemployment Revisited," SciencePo Working papers Main hal-01065470, HAL.
    • Handle: RePEc:hal:spmain:hal-01065470
    Note: View the original document on HAL open archive server: https://hal-sciencespo.archives-ouvertes.fr/hal-01065470
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    References listed on IDEAS

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    1. Dreze, Jacques H., 1997. "Walras--Keynes equilibria coordination and macroeconomics," European Economic Review, Elsevier, vol. 41(9), pages 1735-1762, December.
    2. Carl M. Campbell III & Kunal S. Kamlani, 1997. "The Reasons for Wage Rigidity: Evidence from a Survey of Firms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(3), pages 759-789.
    3. Peter Howitt, 2002. "Looking Inside the Labor Market: A Review Article," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 125-138, March.
    4. Amendola, Mario & Gaffard, Jean-Luc, 1998. "Out of Equilibrium," OUP Catalogue, Oxford University Press, number 9780198293804.
    5. James Tobin, 1993. "Price Flexibility and Output Stability: An Old Keynesian View," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 45-65, Winter.
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