Endogenous Growth and the Labor Market

Cerisier,; Postel-Vinay,

doi:10.2307/20076112

Cited by 5 publications

(4 citation statements)

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“…Indeed, given μ , a permanent increase in the steady‐state rate of innovation I tends to increase both the steady‐state growth rate of final output, γ Y (via ), and the steady‐state unemployment rate, u (via ). This result is akin to that found by Cerisier and Postel‐Vinay (1998) for the case of a search model and differs from Aghion and Howitt (1994) and Mortensen and Pissarides (1995), who find that a permanent increase in the frequency of innovation leaves equilibrium unemployment unaffected, 10 and from Mortensen (2005) who finds a trade‐off between growth and unemployment.…”

Section: The Model Economysupporting

confidence: 38%

“…The first line focuses on institutional issues and leads to policy‐oriented models (Gordon, 1995; Cahuc and Michel, 1996; Van Schaik and De Groot, 1998; Daveri and Tabellini, 2000;Peretto, 2000 among others). The second line focuses on technical change and addresses the issue of growth and unemployment at either micro or macro level (Aghion and Howitt, 1994; Mortensen and Pissarides, 1995; Acemoglu, 1997; Cerisier and Postel‐Vinay, 1998; Postel‐Vinay, 1998; Mortensen, 2005). In both cases though, no clear prediction about how growth affects unemployment is reached.…”

Section: Introductionmentioning

confidence: 99%

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A Schumpeterian Growth Model With Equilibrium Unemployment

Parello

2010

Metroeconomica

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We introduce efficiency-wage unemployment in a model of growth with endogenous technical change. Our research aim is twofold. First, we try to provide an analytically tractable model of growth with efficiency-wage unemployment that can be viewed as alternative to the standard models of growth and search unemployment. Second, we try to analyze the steady-state effects of some labor market policies on unemployment and growth. We find that a positive relationship between growth and unemployment exists and that the effectiveness of any labor market policy aimed at improving the performance of the labor market crucially depends on how individuals discount future income

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Section: The Model Economysupporting

confidence: 38%

Section: Introductionmentioning

confidence: 99%

A Schumpeterian Growth Model With Equilibrium Unemployment

Parello

2010

Metroeconomica

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“…where t = M ( t )= t is decreasing in t . Following the usual treatment in the literature, 11 we assume that when matching occurs to a …rm at time t, the …rm matches with x t workers simultaneously.…”

Section: Matching and Unemploymentmentioning

confidence: 99%

“…Solving (18) and (19) yields the balanced-growth value of U t given by For convenience, we de…ne a transformed variable t A t =L t , which is the per capita level of aggregate technology. Substituting (11), (13) and b t = by t =L t into (27) and then rearranging terms yield We refer to (28) as the R&D free-entry (FE) condition, which contains two endogenous variables f ; g. 16 It is useful to note that the FE condition depends on the nominal interest rate i via the CIA constraint on R&D (i.e., > 0).…”

Section: Steady-state Equilibriummentioning

confidence: 99%

Inflation, Unemployment, and Economic Growth in a Schumpeterian Economy*

Chu

Cozzi

Fan

et al. 2021

Scandinavian J Economics

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This study analyzes the effects of inflation on the long-run nexus between unemployment and economic growth. We introduce money demand via a cash-in-advance (CIA) constraint on R&D investment into a scale-invariant Schumpeterian growth model with matching frictions in the labor market. Given the CIA constraint on R&D, a higher inflation that raises the opportunity cost of cash holdings leads to a decrease in innovation and economic growth, which in turn decreases labor-market tightness and increases unemployment. In summary, the model predicts a positive relationship between inflation and unemployment, a negative relationship between inflation and R&D, and a negative relationship between inflation and economic growth. These theoretical predictions are consistent with recent empirical evidence. Therefore, when inflation is a fundamental variable that affects the economy, unemployment and economic growth exhibit a negative relationship.

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