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Equilibrium unemployment theory Christopher A. Pissarides
Publisher: MIT

Equilibrium Unemployment Theory, Cambridge: MIT. Without limit, or overspend without causing inflation, or that government should spend any sum unwisely. Sound's a bit like Say's Law, the theory that unemployment cannot increase indefinitely as eventually wages will fall and labour will become cheap. Paul Krugman is still trying to deal with equilibrium theory. This is a serious shortcoming as a number of recent theoretical contributions point to major effects of UBs on job reallocation and labor pro- ductivity. Economic, reallocation effects, of unemployment benefits. What it emphatically does mean is that no such sovereign government can be forced to tolerate mass unemployment because of the state of its finances – no matter what that state happens to be. The conflicting claims theory of inflation, and unemployment. 1994 Report and Financial Statements. The conflicting claims theory of inflation goes like this. The Great Depression disproved that theory. Suppose we start in equilibrium with 10 people in an economy each earning 10% of total income.