Find in Library

When heavy unemployment persists year after year, it is natural to infer that labour is over-priced. This explanation may well prove to be a crucially important part of a larger explanation; but it is also clear that there are ambiguities to be removed and questions to be answered. The author analyses the monetarist and neo-classical views on these matters, followed by Keynesian opinions and the need to reconsider traditional models in the light of altered circumstances. Then, the factors influencing efficiency in the course of a cyclical expansion are discussed before some conclusions are drawn.   JEL: E24, J01