Tag Archives: Unemployment

The Myth of ‘Involuntary Unemployment’

Since layoff is necessary to allow obsolete firms to decline or disappear in favor of new firms that tend to conform to the changes of individual preferences, a frictional unemployment emerges.

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Unemployment, Fate or Necessity ?

“Unemployment, Fate or Necessity ?” is a 2005 book originally entitled “Le chômage, fatalité ou nécessité ?”, written by the french economists Pierre Cahuc and André Zylberberg. Below is a review of the book.

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‘Minimum Wage Laws Increase Unemployment’ : A Misunderstanding

Proponents of minimum wage laws usually cite the study “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania” (1994), by David Card and Alan Krueger, as a defense against criticism of the minimum … Continue reading

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Criticism of the Efficiency-Wage Theory

The “Efficiency Wage” is a New Keynesian theory aimed to highlight a so-called market failure. Gregory Mankiw describes the theory as follows : There are various theories about how wages affect worker productivity. One efficiency-wage theory holds that high wages reduce labor … Continue reading

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Herbert Hoover, Sticky Wages, and the Great Depression

Industrial Employment and the Policies of Herbert C. Hoover by Douglas W. MacKenzie (2010) Wages and cycles The idea that President Hoover intensified and prolonged unemployment with his high wage policy depends upon five propositions: 1. He intended to keep … Continue reading

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