36 Unemployment Sylvie Rivot It does not seem an exaggeration to argue that unemployment is one of the most debatable issues, if not the most debatable issue, in Keynes’s General Theory. To find a notion as controversial as Keynes’s concept of involuntary unemployment, we would probably have to invoke Smith’s metaphor of the invisible hand or Marx’s notion of excess profit. More precisely, it seems that the understanding of Keynes’s explanation for unemployment has been obscured by two different kinds of difficulty. First is that the terminology used to
374 Unemployment way to conﬂict, and it proves impossible to establish an unambiguous association between the stagnationist regime and class cooperation on the one hand, and the exhilarationist regime and class conﬂict on the other (Bhaduri and Marglin 1990, Figure 3, p. 389). The evidence on the relationship between real wages and aggregate employment is also rather mixed. In the late 1930s Keynes was convinced by ‘friendly critics’, among them Kalecki, John Dunlop and Lorie Tarshis, that increased employment was associated with higher, not lower, real wages
Stephen A. Woodbury
[ In : Volume 2 , Kenneth G. Dau-Schmidt, Seth D. Harris and Orly Lobel (eds) Labor and Employment Law and Economics ] 1 Defining and measuring unemployment For decades, unemployment posed an embarrassment for economic theory because, as Davidson ( 1990 ) aptly notes, ‘the Walrasian assumption that markets clear necessarily assumes away the possibility of unemployment’. The near absence of theoretical guidance on the nature and definition of unemployment made some comments by Sinclair ( 1987 ) remarkably cogent: ‘Unemployment is like an elephant
own subsistence nevertheless must usually enter the labour market to obtain that which is necessary to settle their tax obligations. Unemployment, the failure to obtain employment that earns wages or salaries paid in money, thus has a dire impact on the jobless, and is also associated with tremendous social and economic costs for society as a whole. Whereas, in neoclassical economics, market systems possess an inherent tendency to full employment, in Post Keynesian economics unemployment is seen as a normal feature of capitalist economies. The effective demand
57. Unemployment Gary Slater Modern economic theory tends to treat unemployment as the result of individual or market pathologies, where the latter variously involve a range of rigidities or imperfections preventing wages adjusting to a market clearing equilibrium. In sharp contrast, Marx argues that unemployment is inherent within capitalism. Indeed, unemployment is both the condition for, and effect of, capital accumulation and it cannot simply be explained as the outcome of malfunctioning markets. Rather, unemployment plays a crucial role underpinning
Anthony J. Culyer
This is that part of total unemployment in an economy caused as people change jobs, engage in job search from a position of not being employed (and therefore perhaps freer to travel to interviews, etc.). Frictional unemployment exists even when there is technically full employment because most people change jobs at some time and many do so frequently in dynamic economies. See Full Employment , Friction Cost , Involuntary Unemployment , Natural Rate of Unemployment , Structural Unemployment . See also Search Friction .
Anthony J. Culyer
Unemployment that exists when workers are willing to accept jobs at the going wage but cannot find vacancies.
Anthony J. Culyer
Structural unemployment exists when an individual’s marginal value to any employer is lower than the minimum wage conventionally or legally payable (in the limit, a person’s work value could be zero in which case their value is lower than any wage payable). This is the main constituent of most countries’ unemployment statistics. Since being active in searching for work is usually a part of the definition of (involuntary) unemployment, some (perhaps many) who are structurally unemployed are not included in unemployment statistics because after a time these
R. Quentin Grafton, Harry W. Nelson, N. Ross Lambie and Paul R. Wyrwoll
A measure of the number of people out of work but willing to work and looking for work. The unemployment rate is measured as a proportion of the total workforce.
James E. Payne
JOBNAME: Cebula PAGE: 1 SESS: 4 OUTPUT: Mon Sep 14 14:01:59 2015 21. The US entrepreneurship– unemployment nexus James E. Payne 21.1 INTRODUCTION There has been a rapidly growing interest by both researchers and policymakers in the role of entrepreneurship in business cycles as well as regional and national economic growth (Wennekers and Thurik, 1999; van Stel et al., 2005; Wong et al., 2005; Acs and Szerb, 2007; Mueller, 2007; Audretsch et al., 2008; Galindo and Mendez, 2014, among others and citations therein).1 Within this literature, a particular focus of