Unemployment: Getting the Questions Right - and Some of the Answers

42 Pages Posted: 4 Jan 2001 Last revised: 14 Jan 2001

See all articles by Olivier J. Blanchard

Olivier J. Blanchard

National Bureau of Economic Research (NBER); Peter G. Peterson Institute for International Economics

Date Written: September 1988

Abstract

This paper analyzes the issue of persistent high unemployment. It focuses on two channels of persistence. The first is capital accumulation. The paper analyzes investment decisions under imperfect competition, focusing in particular on the effects of demand and cost shocks on investment, capital composition and bankruptcies, and their effect on employment and unemployment. The second is labor supply. The paper analyzes the various channels through which the unemployed may become disenfranchised, leading to higher equilibrium unemployment. In both cases, it briefly reviews and assesses the available empirical evidence. It ends by drawing several implications.

Suggested Citation

Blanchard, Olivier J., Unemployment: Getting the Questions Right - and Some of the Answers (September 1988). NBER Working Paper No. w2698. Available at SSRN: https://ssrn.com/abstract=255325

Olivier J. Blanchard (Contact Author)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Peter G. Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

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