Unemployment, capital accumulation and labour market institutions in the Great Recession

Stockhammer, Engelbert, Guschanski, Alexander and Kohler, Karsten (2014) Unemployment, capital accumulation and labour market institutions in the Great Recession. European Journal of Economics and Economic Policies: Intervention, 11(2), pp. 182-194. ISSN (print) 2052-7764

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Abstract

This paper restates the post-Keynesian view of unemployment within a NAIRU framework. In the short run, the private effective labour demand need not be downward sloping because of debt deflation and wage-led demand regimes. In the medium run, the NAIRU will be endogenous because of the social norm character of wage setting and the supply-side effects of capital accumulation. Capital investment rather than labour market institutions is the crucial variable that explains changes in unemployment performance. We provide econometric evidence that the post-Keynesian view holds up well in the recession following the crisis of 2008.

Item Type: Article
Research Area: Economics and econometrics
Faculty, School or Research Centre: Faculty of Arts and Social Sciences > School of Economics, History and Politics (from November 2012)
Depositing User: Engelbert Stockhammer
Date Deposited: 23 Jan 2015 13:49
Last Modified: 23 Jan 2015 13:49
URI: http://eprints.kingston.ac.uk/id/eprint/29870

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