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Unemployment equilibria and input prices: theory and evidence from the United States
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Carruth, Alan A. , Hooker, Mark A. and Oswald, Andrew J. (1998) Unemployment equilibria and input prices: theory and evidence from the United States. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.496).
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Official URL: http://www2.warwick.ac.uk/fac/soc/economics/resear...
Abstract
This paper develops an efficiency-wage model where input prices affect the equilibrium rate of unemployment. We show that a simple framework based on only two prices (the real price of oil and the real rate of interest) is able to explain the main post-war movements in the rate of U.S. joblessness. The equations do well in forecasting unemployment many years out-of-sample, and provide evidence that the oil-price spike associated with Iraq’s invasion of Kuwait appears to be a component of the “mystery” recession which followed.
Item Type: | Working or Discussion Paper (Working Paper) | ||||
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Subjects: | H Social Sciences > HD Industries. Land use. Labor | ||||
Divisions: | Faculty of Social Sciences > Economics | ||||
Library of Congress Subject Headings (LCSH): | Unemployment -- United States, Unemployment -- Mathematical models, Interest rates -- United States, Petroleum products -- Prices -- United States, United States -- Economic conditions -- 20th century | ||||
Series Name: | Warwick economic research papers | ||||
Publisher: | University of Warwick, Department of Economics | ||||
Place of Publication: | Coventry | ||||
Official Date: | January 1998 | ||||
Dates: |
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Number: | No.496 | ||||
Number of Pages: | 25 | ||||
Institution: | University of Warwick | ||||
Status: | Not Peer Reviewed | ||||
Access rights to Published version: | Open Access (Creative Commons) | ||||
Funder: | Economic and Social Research Council (Great Britain) (ESRC), Leverhulme Trust (LT), London School of Economics and Political Science (LSE) |
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