Aggregate Supply and Demand Factors in OECD Unemployment: An Update / Michael Bruno.

Format:

Book

Author/Creator:

Bruno, Michael.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w1696.

NBER working paper series no. w1696

Language:

English

Subjects (All):

Labor supply--Mathematical models.

Labor supply.

Unemployed--Mathematical models.

Unemployed.

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Aggregate Supply and Demand Factors in OECD Unemployment

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1985.

Cambridge, Mass. : National Bureau of Economic Research, 1985.

Summary:

The paper analyzes the change in unemployment in 12 OECD countries over the period 1970-83 in terms of underlying aggregate supply and demand shifts. Earlier evidence on wage gaps (given by Brunoand Sachs) is revised and extended. For most European countries a process of reduction in gaps is taking place in the 1980's, but the average absolute levels, when weighted by country size, are still sizeable, thus a 'classical' element of unemployment remains. However, most of the large additional increase in unemployment after 1980 (as well as the profit squeeze and investment slowdown) is ascribed to the contractionary stance of macropolicy in Europe, in contrast to the subsequent expansion and sharp fall of unemployment in the U.S. The large U.S. deficit coupled with monetary restraint and the resulting dollar appreciation also account for the sharp difference in the behavior of import prices in the U.S. and Europe which in turn may explain the considerably slower inflation deceleration in Europe and the reluctance to expand activity more rapidly.

Notes:

Print version record

September 1985.