Center for Economic Research, Department of Economics, University of Minnesota
This paper is an attempt to extend an analysis of disequilibrium
macroeconomics to a problem of capital accumulation. The real wage is
assumed to be sluggish so that the labor market may be in disequilibrium.
The transaction of labor takes place at the minimum of supply and demand.
The interaction between wage adjustment and capital accumulation is
studied. If wage adjustment is slow, and if the saving rate from profits
is larger than that from wages, then an endogenous force of business
cycles switching between unemployment and overemployment regimes can be
demonstrated. An appendix to this paper shows a sufficient condition
for the stability of differential equation systems in a two-dimensional
Euclidean space with switching regimes. This is a mathematical contribution
which bears an independent interest.
Ito, T., (1979), "Disequilibrium Growth Theory", Discussion Paper No. 113, Center for Economic Research, Department of Economics, University of Minnesota.
Disequilibrium Growth Theory.
Center for Economic Research, Department of Economics, University of Minnesota.
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