Working Paper: NBER ID: w28888
Authors: James D. Hamilton
Abstract: This paper develops a growth model characterized by equilibrium unemployment and sustained monopoly power. The level of demand is a key factor in deviations from the steady-state growth path with a Keynesian-type spending multiplier despite the absence of any nominal rigidities. The key friction in the model is the technological requirement that production of certain goods requires a dedicated team of workers that takes time to train and assemble.
Keywords: No keywords provided
JEL Codes: E0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| demand fluctuations (E32) | output (C67) |
| demand fluctuations (E32) | employment (J68) |
| demand shocks (E39) | real output fluctuations (E39) |
| decrease in demand (D12) | greater impact on output (F69) |
| demand shocks (E39) | delayed hiring of skilled workers (J23) |
| equilibrium implications of productivity growth (O49) | stable unemployment rate (J64) |