Social and Behavioral Sciences Commons^™

The Conflict Between Equilibrium And Disequilibrium Theories: The Case Of The U.S. Labor Market, Richard E. Quandt, Harvey S. Rosen

Upjohn Press

A fundamental controversy in labor economics is whether unemployment is better viewed as an equilibrium or disequilibrium phenomenon. The authors contend that answers to policy problems related to unemployment will depend on which of the two characterizations of the labor market is accepted. They note the effects of inflation, taxes, and unionization on unemployment and describe those factors' effects on the equilibrium/disequilibrium question by presenting both equilibrium and disequilibrium models of the U.S. labor market.