The macroeconomics of labour markets
DOI link for The macroeconomics of labour markets
The macroeconomics of labour markets book
The purpose of this chapter is to review the understanding of labour markets that arises out of macroeconomic theory. It has been difficult to write, predominantly because of the varying background knowledge of the potential readership. For economists, there will be yawning familiarity with much of the technical material that is covered, and its corresponding jargon — IS/LM, efficiency-wages, rational expectations, etc.1 For this reason, accounts of the details of such concepts and the models in which they are embedded will be kept to a minimum, and a certain familiarity with them will be assumed. Those interested in acquiring greater familiarity can consult the standard texts. On the other hand, familiarity with such concepts has not bred contempt, only uncritical use. Much more attention here, then, is devoted throughout to revealing the weakness of macroeconomic theory in general and its treatment of labour markets in particular. As a result, this is the most specialised and advanced chapter in the book with regard to the economics content.