The Post-Keynesian theory of the Labor Market. Explains that Labor is not really a market -- like other markets. it does not have the clearing mechanisms similar to those of others. It is governed by entirely different dynamics. 75 Video Lecture on YouTube Linked below
Final Exam Questions
1. According to conventional economics, when we reduce nominal wages, the demand for labor will increase and the supply will decrease. Thus cutting wages will eliminate surplus labor which is unemployed. Explain why Post-Keynesians do not agree with this analysis. Explain how a cut in nominal wage could lead to even more unemployment.
2. In neoclassical economics, the quantity of production Q of a firm is determined by supply side considerations -- in particular the cost function. In Post-Keynesian, the quantity of output is explained by demand side consideration. Explain clearly the two opposite theories, and then look at empirical evidence to see which of the two is supported by the data.
3. Explain how the presence of a primary (good jobs) and secondary (bad jobs) sector affects the market for labor. Focus on how this makes real world markets DIFFERENT from the neoclassical theory of labor markets based on supply and demand.
4. Explain why labor hours are NOT determined by a choice between labor and leisure, and how this makes real world supply of labor DIFFERENT from the neoclassical theory of the labor market.
Post Keynesian Theories of Labor Market - 75m Video Lecture