How far can we expect the process of contraction described in the last chapter to lead to the establishment of a new equilibrium? This is the first question which we must endeavour to solve with the aid of our analysis of Distribution and Economic Progress. (It is true that we are now concerned with a process of decline, rather than one of progress; but, within limits, our earlier analysis was equally applicable to either case.)
KeywordsReal Wage High Wage Marginal Productivity Unemployment Benefit Closed Community
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- 1.It is probably true, however, that a diminishing population would be accompanied by greater transfer unemployment, owing to the smaller proportion of the population who would be entering industry (the most adaptable section) in any given period. See Robbins, “Note on the Advent of a Stationary Population,” Economica, April, 1929, pp. 76–77.Google Scholar