ON “THE NATURAL RATE OF UNEMPLOYMENT”

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  • 「自然失業率」について
  • シゼン シツギョウリツ ニ ツイテ

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Abstract

1. We propose a theoretical model from which we can derive Monetarist's following two main assertions; a) If the government tries to lower the rate of unemployment below the natural rate, there must occurs hyper-inflation, b) If the government confines himself to keep the rate of increase of money constant, the rate of unemployment converges to the natural rate.<br>2. The model have the following three assumptions; α) the private investment demand is highly sensitive to the interest rate and insensitive to the expected rate of profit, β) the rate of change of money wage rate is governed by the expected inflation rate as well as the situation of labor market, γ) the income velocity of money is not so sensitive to the change in the interest rate and expected inflation rate.<br>3. Among the above three, the assumption of investment demand α) is most important. If the private investment demand is highly sensitive to the change in the expected rate of profit and insensitive to the interest rate, then Monetarist's assertion b) cannot be established. This instability of private investment makes Keynesian policy necessary. The weakest point of Monetarist lies in their naive view on the private investment demand.<br>4. The assumption of the movement of money wage rate β) is the main cause of monetarist's assertion a). Owing to the instability of private investment demand, the government is forced to exercise Keynesian policy. Then by β) we must have hyper-inflation. This is a real dilemma of modern capitalism. And this dilemma cannot be resolved by the retreat of the government from market nor by the authoritative incomes policy.

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