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Should We Wait to ‘Grow Out of’ Unemployment? The Implications of a Neoclassical Calibration Analysis
Author(s) -
COLEMAN WILLIAM
Publication year - 1998
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1998.tb01914.x
Subject(s) - economics , unemployment , growth model , calibration , capital (architecture) , econometrics , capital accumulation , labour economics , keynesian economics , macroeconomics , human capital , economic growth , statistics , mathematics , geography , archaeology
The paper uses a Solow‐Ramsey growth model to evaluate the effectiveness of growth as a remedy for unemployment in the face of a wage minimum. Plausible calibration of the model suggests that the elimination of 5 per cent unemployment by the process of capital accumulation may take about 20 years.