Nonlinear Dynamics and Unemployment TheoryThis book attempts to integrate two lines of research. It joins the tradition of nonlinear macrodynamic models of cyclical growth, in particular the Goodwin/Kaldor/Phillips-type models of persistent fluctuations and limit cycles. Capital deepening and capital widening investment is introduced into models of cyclical growth. This approach is combined with recent neo-Keynesian analysis of wage-price formation and unemployment theory. Unemployment is decomposed in terms of demand deficiencies, job shortages, and the impact of capital-labor substitution. In this way a dynamic analysis of unemployment in terms of Classical, Keynesian and technological elements is obtained. It is shown that different components of unemployment can display their own cyclical frequencies and patterns. In this way the typical long and short term cyclical behavior of unemployment is simulated by an integrated nonlinear model of persistent growth cycles. |
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adaptive expectations adjustment aggregate amplitude analysis assumption behavior business cycle capacity utilization capital accumulation capital deepening capital gap capital stock capital-labor substitution capital-output ratio chapter classical unemployment competing claims constant core inflation cycle model cyclical growth damping function derived distributive gap dynamics effects employment cycles endogenous equal equilibrium point example Figure fluctuations gives rise Goodwin growth-cycle models implies income distribution increase inflation instability investment function Keynesian labor intensive labor market labor productivity Liénard equation linear long wave mechanism monetary damping negative nonlinear accelerator output growth parameters period length periodic solution phase diagram Ploeg positive price equations price setters price setting production function real wage real wage rate relationship relative replacement investment sector shifts simulation stable limit cycles structural unemployment switch point target wage technical progress technological unemployment theory Thio trend upswing utilization rate variables wage and price wage share warranted rate zero