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Title: |
Quantity Expectations and Unemployment in Non-Walrasian Economics |
| Author: |
Hsu, Chen-Min |
| Author
Affiliation: |
Nat'l Taiwan U |
| Source: |
International Economic Journal, Autumn 1988, v. 2, no. 3, pp. 61-77 |
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Publication Date: |
Autumn 1988 |
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Abstract: |
The paper explores why different regimes
of unemployment might emerge and what the role of quantity expectations
is. Suppose that both households and firms take quantity rationing
expectations into account. Then it can be shown that involuntary
unemployment in the sense that effective demand is deficient would occur
as long as households react to the quantity (constraint) expectations
more strongly than firms do. We also show that only when households are
more pessimistic than firms are do quantity expectations exhibit
"bootstraps" property, i.e., the regime of Keynesian unemployment is
more likely than that of Classical unemployment to emerge today if
people expect that Keynesian unemployment will prevail tomorrow. |
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