Published January 1987
| Submitted
Discussion Paper
Open
The Natural Rate in a Share Economy
- Creators
- Koford, Kenneth J.
- Miller, Jeffrey B.
Chicago
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Abstract
Will the natural rate 0f unemployment be lower in the share economy described by Martin Weitzman than in a wage economy? We examine this question for a search economy with an equilibrium unemployment rate, a version 0f Salop's (1979) quits model. Equilibrium unemployment is the same in both economies. We also examine firms' short-run adjustment to shocks. Share-economy firms adjust output less than wage-economy firms for both demand shocks and labor-supply shocks. Depending on whether rapid output adjustment is stabilizing, a share economy may be more or less stable than a wage economy.
Additional Information
We would like to thank Pamela Brown, David Colander, Mark Kuperberg and James Mulligan for helpful comments. An earlier version was presented at the Eastern Economic Association annual meetings, Philadelphia, April 1986.Attached Files
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Additional details
- Eprint ID
- 81326
- Resolver ID
- CaltechAUTHORS:20170911-153623191
- Created
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2017-09-11Created from EPrint's datestamp field
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2019-10-03Created from EPrint's last_modified field
- Caltech groups
- Social Science Working Papers
- Series Name
- Social Science Working Paper
- Series Volume or Issue Number
- 631