JOURNAL ARTICLE
Cite JOURNAL ARTICLE
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Suchexternalitäten auf dem Arbeitsmarkt
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 113 (1993), Iss. 1 : pp. 29–53
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Article Details
Illing, Gerhard
Abstract
The paper présents a simple static model with search externalities in the labor market. It is shown that increasing returns to scale in the transaction technology create positive externalities which give rise to feed-back effects and may result in multiple, Pareto-ranked equilibria. With economies of scale in matching, fluctuations in the economy can be large even with a low elasticity of search activity. The allocative role of wages in the presence of search frictions and hysteresis effects are discussed. Finally, it is shown that with a more general transaction technolgy, even with constant returns to scale multiple equilibria may occur in the presence of externalities.