The replacement problem

Article Abstract:

How an adoption-replacement decision can affect an economy's long-run growth is analyzed. A dynamic vintage capital model is formulated where depreciation and growth are treated as exogenous and capital disappears only because of replacement. Results reveal that more efficient capital goods are produced when investments are made in human capital by skilled agents. Results also reveal that a continual displacement of old technologies by more efficient new ones will have implications on both employment and unemployment.

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Unemployment and the business cycle

Article Abstract:

A general equilibrium model where labor effort is observed carelessly which leads to unemployment is presented. The shirkers instead of being dismissed, face only monetary punishment, which can generate high variation in employment and low variation of real wages.

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Equilibrium unemployment

Article Abstract:

A study presents a search-theoretic model of equilibrium unemployment and demonstrates this to be consistent with the major regularities of the business cycles and the labour market. Two applications of the model to policy issues are assessed.

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