Year: 1993
Author: Illing, Gerhard
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 113 (1993), Iss. 1 : pp. 29–53
Abstract
The paper présents a simple static model with search externalities in the labor market. It is shown that increasing returns to scale in the transaction technology create positive externalities which give rise to feed-back effects and may result in multiple, Pareto-ranked equilibria. With economies of scale in matching, fluctuations in the economy can be large even with a low elasticity of search activity. The allocative role of wages in the presence of search frictions and hysteresis effects are discussed. Finally, it is shown that with a more general transaction technolgy, even with constant returns to scale multiple equilibria may occur in the presence of externalities.
Journal Article Details
Publisher Name: Global Science Press
Language: Multiple languages
DOI: https://doi.org/10.3790/schm.113.1.29
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 113 (1993), Iss. 1 : pp. 29–53
Published online: 1993-01
AMS Subject Headings: Duncker & Humblot
Copyright: COPYRIGHT: © Global Science Press
Pages: 25