Capital Accumulation and Unemployment: A Tale of Two Continents

27 Pages Posted: 7 Apr 2001

See all articles by Jim Malley

Jim Malley

University of Glasgow - Department of Economics

Thomas Moutos

Athens University of Economics and Business - Department of International and European Economic Studies; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: January 2000

Abstract

In contrast to much recent work regarding the causes of European unemployment, in this paper, we emphasise the importance of capital accumulation. But unlike the few previous studies which have examined the relationship between capital accumulation and unemployment, we argue that what matters for the evolution of employment [and the unemployment rate] is not the absolute growth rate of a country's capital stock, but its evolution relative to other countries' capital stock. The empirical validity of the above statement is demonstrated for almost all OECD countries using quarterly time-series data from 1961-1995. More detailed evidence is also presented for Germany, Japan and the United Kingdom.

JEL Classification: E22, E24, J21

Suggested Citation

Malley, Jim and Moutos, Thomas, Capital Accumulation and Unemployment: A Tale of Two Continents (January 2000). Available at SSRN: https://ssrn.com/abstract=263971 or http://dx.doi.org/10.2139/ssrn.263971

Jim Malley (Contact Author)

University of Glasgow - Department of Economics ( email )

Adam Smith Building
Glasgow, Scotland G12 8RT
United Kingdom
+44 141 330 4617 (Phone)
+44 141 330 4940 (Fax)

HOME PAGE: http://www.gla.ac.uk/economics/malley/

Thomas Moutos

Athens University of Economics and Business - Department of International and European Economic Studies ( email )

76 Patission Street
GR-10434 Athens
Greece

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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