Effects of an Employment Subsidy in Long-Run Stagnation

Murota, Ryu-ichiro

doi:10.2139/ssrn.2780345

Cited by 2 publications

(9 citation statements)

References 45 publications

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“…The reason of the ineffectiveness of the present model is that the marginal utility of money is stuck at its lower bound v ′ . See Ono and Ishida (2014) and Murota (2016) for similar results. Finally, I discuss what fiscal and monetary policies can pull the economy out of long-run stagnation.…”

Section: Murotamentioning

confidence: 55%

“…25 See, e.g., Nishizaki, Sekine, and Ueno (2014, fig. 4) and Murota (2016, fig. 1) for demand deficiency and Murota and Ono (2012, figs.…”

Section: Proposition 2 In the Steady State With Deficient Aggregate Dmentioning

confidence: 96%

“…where c t is consumption, m t is real money holdings, ρ (> 0) is the subjective discount rate, and u (·) and v(·) satisfy 4 Using fair wage models, Ono and Ishida (2014) examine the effects of fiscal and monetary expansions, and Murota (2016) explores the effects of an employment subsidy in addition to these expansions.…”

Section: Firm Household and Governmentmentioning

confidence: 99%

“… When μ is negative,

\overset{π}{true}

is negative. In contrast, when μ is positive,

\overset{π}{true}

can be positive or negative, namely, stagflation or deflationary stagnation can arise (see Murota, ). …”

mentioning

confidence: 99%

“…However, they deal with a short-run slump, whereas I focus on long-run stagnation. Ono and Ishida (2014) and Murota (2016) provide microfoundations for nominal wage stickiness and analyze long-run stagnation. However, they neither consider the presence of labor unions nor investigate the effects of unemployment benefits.…”

mentioning

confidence: 99%

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Aggregate demand deficiency, labor unions, and long‐run stagnation

Murota

2018

Metroeconomica

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Using a money‐in‐the‐utility‐function model, this paper considers long‐run stagnation where insatiable demand for money persistently creates aggregate demand deficiency and consequent unemployment in the presence of nominal wage stickiness attributed to union wage setting. In this long‐run stagnation, generous unemployment benefits reduce unemployment. Moreover, paradoxically, unemployment declines if labor unions give weight to nominal wage gains rather than employment increases.

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Section: Murotamentioning

confidence: 55%

“…25 See, e.g., Nishizaki, Sekine, and Ueno (2014, fig. 4) and Murota (2016, fig. 1) for demand deficiency and Murota and Ono (2012, figs.…”

Section: Proposition 2 In the Steady State With Deficient Aggregate Dmentioning

confidence: 96%