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Makroökonomik der Kapitalmangel-Arbeitslosigkeit
Credit and Capital Markets – Kredit und Kapital, Vol. 19 (1986), Iss. 3 : pp. 313–324
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Michael Carlberg, Hamburg
References
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Abstract
Macroeconomic of Unemployment Due to Lack of Capital
The analysis is performed within the framework of a growing economy. Firms employ capital and labour to produce an homogeneous good. The labour supply grows at an exogenous rate. Initially full employment prevails. If, now, the propensity to save diminishes, the formation of capital is reduced. Thereupon the wage rate must fall; otherwise there will be a danger of unemployment. Assuming that the wage rate is rigid, unemployment due to lack of capital occurs. The unemployment rate rises for period after period. If the propensity to save diminishes still further, the increase in unemployment is accelerated. Simultaneously the growth of the economy slows down. Basically the same result occurs in the following situations: increase in public borrowing, government buying or the interest rate abroad.