Munich Personal RePEc Archive

Indivisible labor supply and involuntary unemployment: Increasing returns to scale case

Tanaka, Yasuhito (2019): Indivisible labor supply and involuntary unemployment: Increasing returns to scale case.

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Abstract

We show the existence of involuntary unemployment without assuming wage rigidity. Key points of our analysis are indivisibility of labor supply and increasing returns to scale. We derive involuntary unemployment by considering utility maximization of consumers and profit maximization of firms in an overlapping generations model under monopolistic competition with indivisibility of labor supply and increasing returns to scale technology.

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