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Equilibrium unemployment theory Christopher A. Pissarides
Publisher: MIT

As the following diagram shows, labor-market-tightness is highly procyclical. Equilibrium Unemployment Theory. His finding that the only equilibrium price was the monopoly became known as the Diamond paradox. Obstfeld & K Rogoff, Foundations of International Macroeconomics, MIT Press, 2000; P Aghion & P Howitt, Endogenous Growth Theory, MIT Press 1998; C A Pissarides, Equilibrium Unemployment Theory, MIT Press 2000. Speech delivered August 17 in Marquette, MI. Suppose we start in equilibrium with 10 people in an economy each earning 10% of total income. Recent labor markets developments, including mismatches in the skills of workers and jobs, extended unemployment benefits, and very high rates of long- term joblessness, may be impeding the return to "normal" unemployment rates of around 5%. The conflicting claims theory of inflation goes like this. The conflicting claims theory of inflation, and unemployment. The v/u ratio plays a prominent role equilibrium unemployment theory; see Diamond, Mortensen and Pissarides. What Is the New Normal Unemployment Rate?