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Involuntary Unemployment and the Existence of GDP Functions
Author(s) -
Albert Max,
Meckl Jürgen
Publication year - 2003
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/1467-999x.00160
Subject(s) - economics , unemployment , economic rent , wage bargaining , wage , involuntary unemployment , distortion (music) , efficiency wage , labour economics , production (economics) , function (biology) , full employment , macroeconomics , microeconomics , amplifier , evolutionary biology , biology , cmos , electronic engineering , engineering
We develop a simple general equilibrium model of production where, despite the existence of involuntary unemployment, non–equalized job rents are the only distortion. Hence, a standard GDP function exists. Unemployment results from either efficiency wage setting or wage bargaining.