Unemployment Equilibria and Input Prices: Theory and Evidence from the United States

Alan A. Carruth, Mark A. Hooker and Andrew Oswald

No 268778, Economic Research Papers from University of Warwick - Department of Economics

Abstract: This paper develops an efficiency-wage model where input prices affect the equilibrium rate of unemployment. We show that a simple framework based on only two prices (the real price of oil and the real rate of interest) is able to explain the main post-war movements in the rate of U.S. joblessness. The equations do well in forecasting unemployment many years out-of-sample, and provide evidence that the oil-price spike associated with Iraq’s invasion of Kuwait appears to be a component of the “mystery” recession which followed.

Keywords: Labor and Human Capital; Research Methods/ Statistical Methods (search for similar items in EconPapers)
Pages: 25
Date: 1998-01-01
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Citations: View citations in EconPapers (136)

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Related works:
Journal Article: Unemployment Equilibria And Input Prices: Theory And Evidence From The United States (1998)
Working Paper: Unemployment Equilibria and Input Prices: Theory and Evidence from the United States (1998)
Working Paper: Unemployment Equilibria and Input Prices: Theory and Evidence from the United States (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwarer:268778

DOI: 10.22004/ag.econ.268778

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