Munich Personal RePEc Archive

Divisibility and indivisibility of labor supply, and involuntary unemployment: A monopolistic competition model with homothetic preferences

Tanaka, Yasuhito (2020): Divisibility and indivisibility of labor supply, and involuntary unemployment: A monopolistic competition model with homothetic preferences.

[img]
Preview
PDF
MPRA_paper_98406.pdf

Download (76kB) | Preview

Abstract

We show the existence of involuntary unemployment without assuming wage rigidity. We derive involuntary unemployment by considering utility maximization of consumers and profit maximization of firms in an overlapping generations model under monopolistic competition with increasing or constant returns to scale technology and homothetic preferences of consumers. Indivisibility of labor supply may be a ground for the existence of involuntary unemployment. However, we show that under some conditions there exists involuntary unemployment even when labor supply is divisible.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.