Year: 1987
Type: report
Abstract: The paper considers the analytical underpinnings of the scope for and limits of demand and supply management.After restating a general policy effectiveness result for New-Classical macroeconomic models, several non-Wairasan equilibrium models are considered.These use the efficiency wage hypothesis to generate equilibrium unemployment in the labor market and imperfect competition in the goods market to generate scope for demand management.Hysteresis models of the natural rate are also reviewed briefly.Tentative implications are drawn for the contributions of demand and supply management to the resolution of the European unemployment problem.
DOI: 10.3386/w2333
Author: Willem Buiter
Institutions: National Bureau of Economic Research, Yale University
Language: English
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1537163093