Premium
Employment Hysteresis in an Overlapping‐Generations Insider‐Outsider Model
Author(s) -
McCausland W. David
Publication year - 1998
Publication title -
australian economic papers
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 15
eISSN - 1467-8454
pISSN - 0004-900X
DOI - 10.1111/1467-8454.00029
Subject(s) - insider , overlapping generations model , hysteresis , economics , state (computer science) , labour economics , political science , computer science , physics , law , condensed matter physics , algorithm
This paper shows, within an overlapping generations insider‐outsider model, that, in the presence of training costs, there may be multiple employment equilibria. Adverse technology shocks may shift the system from ‘high’ to ‘low’ employment steady states. Restoration of the initial technological state does not always lead to the ‘high’ employment equilibrium being returned ‐ the system may get ‘stuck’ in a ‘low’ employment state.