The Impossibility of Underemployment With More Than One Product Market

Laurence Lasselle, S Svizzero

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)

Abstract

We investigate the link between 'underemployment at all wages' and income feedback effects due to firms' activities in an economy with imperfect competition in the product markets. The size of income feedback effects negatively depends on the number of product markets. We strengthen a previous result demonstrated in an overlapping generations model with inelastic price expectations: underemployment at all wages may only exist when the economy contains a single product market, i.e, when firms integrate all feedback effects in their programs.

Original languageEnglish
Pages (from-to)157-165
Number of pages9
JournalOxford Economic Papers
Volume53
Issue number1
DOIs
Publication statusPublished - Jan 2001

Keywords

  • INVOLUNTARY UNEMPLOYMENT
  • IMPERFECT COMPETITION
  • MODEL

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