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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/3954| Title: | The macroeconomics of the labor market: three fundamental views |
| Keywords: | J21 E24 E22 J30 ddc:330 Unemployment Interactive labor market dynamics Interplay of lags and shocks Frictional growth Growth drivers Theorie der Arbeitslosigkeit Arbeitsmarkt Theorie OECD-Staaten |
| Issue Date: | 16-Oct-2013 |
| Publisher: | Department of Economics, Queen Mary College London |
| Description: | We distinguish and assess three fundamental views of the labor market regarding the movements in unempoyment: (i) the frictionless equilibrium view; (ii) the chain reaction theory, or prolonged adjustment view; and (iii) the hysteresis view. While the frictionless view implies a clear compartmentalization between the short- and long-run, the hysteresis view implies that all the shortrun fluctuations automatically turn into long-run changes in the unemployment rate. We assert the problems faced by these conceptions in explaining the diversity of labor market experiences across the OECD labor markets. We argue that the prolonged adjustment view can overcome these problems since it implies that the short, medium, and long runs are interrelated, merging with one another along an intertemporal continuum. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/3954 |
| Other Identifiers: | http://hdl.handle.net/10419/3954 ppn:523821778 |
| Appears in Collections: | EconStor |
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