Underemployment Equilibria: Essays in Theory, Econometrics and Policy

by Jacques Drèze (Author)



This book is a selection of Jacques Drèze's work over the past ten years on the topics of stagflation, lasting unemployment and unused capacity. At the theoretical level, the author has contributed to the formulation and analysis of general equilibrium models that allow for price rigidities and excess supply. These models have interesting macroeconomic implications and lend themselves to econometric implementation. They thus help to pull together separate branches of economics. These models have also been found helpful in the study of related topics, such as equilibrium with increasing returns, public goods, price dynamics and the limitations of wage flexibility. This collection of papers is representative of efforts by European economists to integrate micro- and macro-economics, and to use theory for empirical and policy purposes. How their thinking developed, and what contribution of lasting value it made, is sketched in an overview chapter.

Table of Contents

Preface
Acknowledgements
Part I. Overview:
1. Underemployment equilibria: from theory to economics and policy
Part II. Equilibria With Price Rigidities:
2. Existence of an exchange equilibrium under price rigidities
3. On supply-constrained equilibria
4. Competitive equilibria with quantity-taking producers and increasing returns to scale
Part III. Efficiency of Constrained Equilibria:
5. Optimality properties of rationing schemes
6. Values of markets with satiation or fixed prices
Part IV. Public Goods and the Public Sector:
7. Public goods with exclusion
8. Second-best analysis with markets in disequilibrium: public sector pricing in a keynesian regime
Part V. Price Adjustments:
9. Demand estimation, risk aversion and sticky prices
10. Stability of a keynesian adjustment process
Part VI. Wage Policies:
11. The role of securities and labour contracts in the optimal allocation of risk-bearing
12. Wages, employment and the equity-efficiency trade-off
13. Labour management, contracts and capital markets: some macroeconomic aspects, and conclusions
Part VII. Econometrics:
14. The trade-off between real wages and employment in an open economy (Belgium)
15. A discussion of Belgium unemployment, combining traditional concepts and disequilibrium econometrics
16. Europe's unemployment problem: introduction and synthesis
Part VIII. Policy:
17. Work-sharing: some theory and recent European experience
18. The two-handed growth strategy for Europe: autonomy through flexible cooperation
References
Index.