Author : Arthur J. Chiang
Publisher : Stanford University
ISBN 13 :
Total Pages : 115 pages
Book Rating : 4.F/5 ( download)
Book Synopsis Multiple Unemployment Equilibria Under Non-representative Agent Demand by : Arthur J. Chiang
Download or read book Multiple Unemployment Equilibria Under Non-representative Agent Demand written by Arthur J. Chiang and published by Stanford University. This book was released on 2011 with total page 115 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation analyzes the possibility that high unemployment can be be self-reinforcing through its effects on the distribution of income and, consequently, aggregate demand. The major results of my work demonstrate that these forces can lead to multiple macroeconomic equilibria which are indexed by the level of unemployment. By characterizing low output and employment states as equilibrium outcomes, this thesis provides a coherent theoretical explanation for periods of persistently high unemployment. The key property throughout is non-homotheticity of consumers' preferences, whereby the market demand for goods changes as income distribution changes, even if the total income of all consumers remains fixed. This implies that, unlike in many macroeconomic models, demand cannot be generated from a representative agent and, crucially, that changes in employment along the extensive, as opposed to intensive, margin can have more severe general equilibrium consequences.