Carruth, Alan A. , Hooker, N. and Oswald, Andrew J. (1998) Unemployment equilibria and input prices : theory and evidence from the United States. Review of Economics and Statistics, Vol.80 (No.4). pp. 621-628. doi:10.1162/003465398557708

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Abstract

The paper develops an efficiency-wage model where input prices affect the equlibrium 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. joblessnss. The equations do well in forecasting unemployment many out-of-sample, and provide evidence that the oil price spike associated with Iraq's invasion of Kuweit appears to be a component of the "mystery" recession which followed.

Item Type:	Journal Article
Subjects:	H Social Sciences > HC Economic History and Conditions
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Unemployment -- United States, Petroleum products -- Prices, Petroleum industry and trade
Journal or Publication Title:	Review of Economics and Statistics
Publisher:	MIT Press
ISSN:	0034-6535
Official Date:	November 1998
Dates:	Date Event November 1998 Published
Volume:	Vol.80
Number:	No.4
Page Range:	pp. 621-628
DOI:	10.1162/003465398557708
Status:	Peer Reviewed
Access rights to Published version:	Open Access
Funder:	Economic and Social Research Council (Great Britain) (ESRC), Leverhulme Trust (LT)

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