PRICE FLEXIBILITY AND UNEMPLOYMENT: MICROECONOMICS OF SOME OLD-FASHIONED QUESTIONS

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概要

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• The paper examines the effect of moneywage cut on employment - an issue on which traditional macrotheory and recent microtheory derive opposite conclusions. We show that if prices are flexible the effect of money-wage cut on employment is uncertain, and its direction depends on the nature of the house-holds' utility functions. Since this opposes the established microtheoretic result that the cut in such situations is always expansionary, we examine the standard demonstrations showing that they implicitly restrict the utility functions. This brings microtheoretic result on wage-cut in line with the standard macro-economic result that money-wage cut is generally ambiguous in effect, unless additional restrictions are imposed on the aggregate consumption function.

• 慶應義塾大学の論文

著者

• Sanyal Amal

  Centre For Economic Studies And Planning Jawaharlal Nehru University

• MUKHERJI Anjan

  Centre for Economic Studies and Planning Jawaharlal Nehru University

• MUKHERJI Aryan

  Centre for Economic Studies and Planning Jawaharlal Nehru University

関連論文

• UNCERTAINTY, LIQUIDITY AND THE DEMAND FOR MOMEY
• PRICE FLEXIBILITY AND UNEMPLOYMENT: MICROECONOMICS OF SOME OLD-FASHIONED QUESTIONS

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