Why labour markets don't clear

By -


New Keynesians argue that sticky wages prevent labour markets from clearing. I disagree - I think labour markets can eventually clear. But we don't allow them to do so, because the social costs of are far too high. At Pieria, I explain why this is. Read the whole article here.


Comments

  1. Dinero7 April 2014 at 11:41

    This comment has been removed by the author.

    ReplyDelete
  2. Dinero7 April 2014 at 11:42

    Goods and services are expendable, people are not , and so a truly free market in goods , services and labour can't be.
    On the subject of absolutes , unemployment is a feature not of a poor country but of a rich one, a country can only have a permanent unemployment level if it can afford it.
    As for the clustering I have heard that wages for bar staff work went down after the minimum wage was introduced.

    ReplyDelete
  3. Anonymous7 April 2014 at 18:02

    With capitalism, people are definitely expendable.

    ReplyDelete

Post a Comment

Popular posts from this blog

WASPI Campaign's legal action is morally wrong

By -
Image
I haven't written a post about WASPI for a very long time. I felt I had said everything I wanted to say, and it had become evident that the WASPI campaign and its offshoots had neither the widespread support nor the legal arguments that they claimed. Labour's proposed £58bn payment to WASPI women contributed to its disastrous defeat at the 2019 General Election. And in 2020, the hardline Back to 60 group's bid to overturn their state pension age rises failed in the Court of Appeal. The Government had no intention of compensating WASPI women for their lost pensions, and there was neither legal nor political means to force it to do so. The campaign seemed, in short, dead in the water.  But it seems it isn't, quite. Some years ago, WASPI campaign received legal advice that a challenge to the legislation would almost certainly fail but that there might be a case for maladministration on the part of the DWP. Women would have to make individual maladministration claims and
Read more

The foolish Samaritan

By -
Someone has just put this comment on my post " The Golden Calf ": Luke 10:30-37 Jesus replied, “A man was going down from Jerusalem to Jericho, and he fell among robbers, who stripped him and beat him and departed, leaving him half dead. Now by chance a priest was going down that road, and when he saw him he passed by on the other side. So likewise a Levite, when he came to the place and saw him, passed by on the other side. But a Samaritan, as he journeyed, came to where he was, and when he saw him, he had compassion. He went to him and bound up his wounds, pouring on oil and wine. Then he set him on his own animal and brought him to an inn and took care of him.  And the next day he took out two denarii and gave them to the innkeeper, saying, ‘Take care of him, and whatever more you spend, I will repay you when I come back.’ Which of these three, do you think, proved to be a neighbor to the man who fell among the robbers?” He said, “The one who showed him mercy.” And Jesu
Read more

Banking should not be boring

By -
Image
Since the financial crisis, some people have argued that “Banking should be boring”. The idea is that banking should be limited to simple deposit-taking, lending and payments services. We don’t need the trappings of modern investment banking: structured lending schemes, derivative products, complex risk metrics, synthetics and the like. They may be fun to create, and highly lucrative to trade, but they aren’t socially useful. Let’s get back to basics. All we need is little banks, simple products and local bank managers operating the 3-6-3 rule: “Borrow at 3%, lend at 6% and be on the golf course by 3pm”. Banks are so much better when they are boring. Of course, this depends on what you mean by “boring”. A friend of mine is a civil engineer. She is fascinated by sewers. No, this is not a joke (and yes, I know about the “Yellow Pages” advert for civil engineers that said “Boring: see civil engineering”). She really is. Peering into smelly sewers all day is not my idea of an inter
Read more