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Unemployment and Capital Accumulation in Interwar Britain

Chouliarakis, George (2003) Unemployment and Capital Accumulation in Interwar Britain. Working Paper. University of Essex, Department of Economics, Economics Discussion Papers, Colchester.

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Abstract

The paper uses the Kalman filter method to estimate the time-varying NAIRU of interwar Britain and shows that, during the 1930s, the NAIRU drifted upwards by approximately four per cent. Also, the paper presents an imperfect competition model which predicts that, in the medium run, the NAIRU depends on labour market institutions, unanticipated total factor productivity growth and capital accumulation. Econometric evidence based on data from interwar Britain does not contradict this hypothesis. In particular, it supports the hypothesis that the rising trend of the NAIRU during the 1930s is partly due to a slowdown in capital accumulation demonstrating, thus, that adverse demand shocks may have long-lasting effects.

Item Type: Monograph (Working Paper)
Uncontrolled Keywords: NAIRU; Kalman filter; interwar unemployment; unemployment persistence.
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jenny Connolly
Date Deposited: 28 Aug 2014 14:19
Last Modified: 28 Aug 2014 14:19
URI: http://repository.essex.ac.uk/id/eprint/8864

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