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Javier Birchenall
''Capital accumulation, unemployment, and the putty-clay''
( 2004, Vol. 5 No.19 )
This note studies the dynamics of labor markets in a putty-clay framework. It analyzes the evolution of job creation and job destruction in an economy without market frictions. Unemployment and labor market flows emerge under putty-clay technologies because low productive jobs become unused factors. As capital accumulates, firms destruct low productive jobs by obsolescence. Simultaneously, the use of capital intensive technologies s new jobs by the low substitution between capital and labor.
JEL: E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
D9 - Intertemporal Choice and Growth: General
Manuscript Received : Oct 26 2004 Manuscript Accepted : Nov 06 2004

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