Competing Theories of Unemployment and Economic Policies: Evidence from the U.S., Swedish and German Economies

The Indian Economic Journal, Vol. 56, No. 3, p. 90-108, 2008

Posted: 6 Jan 2013

See all articles by Constantinos Katrakilidis

Constantinos Katrakilidis

Aristotle University of Thessaloniki - Department of Economics

Persefoni Tsaliki

Aristotle University of Thessaloniki

Date Written: 2008

Abstract

The objective of the paper is to evaluate the explanatory power of three competing core interpretations and economic strategy approaches to unemployment. The first is the neo-classical hypothesis according to which the rigidities in the labour market are responsible for the presence of unemployment. The second is the Keynesian hypothesis according to which the market system fails to create adequate effective demand for the full employment of labour. Finally, the third is the classical/Marxian model according to which employment or unemployment are depended on the dynamics of capital accumulation. The econometric analysis uses data from the US, German and Swedish economies which are characterised by quite diverse labour market structures. The results of empirical analysis reveals that the explanatory content of both the Keynesian and the dassical/Marxian core models fared better than the mainstream approach.

Keywords: Unemployment

JEL Classification: C22

Suggested Citation

Katrakilidis, Constantinos and Tsaliki, Persefoni, Competing Theories of Unemployment and Economic Policies: Evidence from the U.S., Swedish and German Economies (2008). The Indian Economic Journal, Vol. 56, No. 3, p. 90-108, 2008, Available at SSRN: https://ssrn.com/abstract=2196891

Constantinos Katrakilidis (Contact Author)

Aristotle University of Thessaloniki - Department of Economics ( email )

Thessaloniki, 54124
Greece

HOME PAGE: http://users.auth.gr/katrak

Persefoni Tsaliki

Aristotle University of Thessaloniki ( email )

Thessaloniki
Greece

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