Layard, Richard and Bean, Charles 
ORCID: 0000-0002-6524-8280
(1989)
Why does unemployment persist?
Scandinavian Journal of Economics, 91 (2).
371 - 396.
ISSN 0347-0520
Abstract
The main movements of unemployment correspond to fluctuations in the short-run NAIRU (around a stable long-term NAIRU). These supply-side fluctuations have two main origins: (i) variations in the number of "insiders" involved in wage-setting; (ii) variations in the effectiveness of the unemployed "outsiders" as potential job-seekers. The evidence of micro studies suggests that (ii) is more important than (i), and this also helps to explain the widespread shift outwards in the u/v curve. To derive these arguments rigorously, the paper presents a simple model of efficiency wages, another of collective bargaining, and finally a fully dynamic model with labour market flows.
| Item Type: | Article |
|---|---|
| Official URL: | https://onlinelibrary.wiley.com/journal/14679442 |
| Additional Information: | © 1989 Wiley-Blackwell Publishing Ltd. |
| Divisions: | Centre for Economic Performance Economics |
| Subjects: | H Social Sciences > HD Industries. Land use. Labor |
| Sets: | Collections > Economists Online Research centres and groups > Centre for Economic Performance (CEP) Departments > Economics |
| Date Deposited: | 26 Jun 2008 13:23 |
| Last Modified: | 03 Sep 2021 23:10 |
| URI: | http://eprints.lse.ac.uk/id/eprint/6106 |
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