This paper aims to study the causes of unemployment offered by the principal schools of through in macroeconomics and to explain the causes of unemployment; I have chosen to study the French case.
An internationally recognised definition of unemployment considers the unemployed to be people of working age who are jobless but who are both available for work and actively seekingemployment. (Chapter 9 of Mulhearn & Vane, 2011)
Major political issue and still relevant, unemployment can be defined in 3 stages: frictional unemployment is temporary and is due to changes in labour markets, while cyclical unemployment occurs when the demand for labour is low. Finally, we distinguish a third type of unemployment, structural unemployment, reflecting a mismatch between supplyand demand works.
Different schools of economists have tried to explain unemployment and to find the origins and solutions. These different schools of thought are generally divided into two main streams: the classical liberals on one side (A. Smith, D. Ricardo, JB Say) and the Keynesians on the other.
Massively over the past fifteen years in France, unemployment is a major economic and socialimportance. Associated with poverty, insecurity and exclusion, it is also at the forefront of political debate since the end of the Thirty Glorious Years refers to the thirty years from 1945-1975 following the end of the Second World War in France.
The first part shows how these different schools of thought they have been able to analyze the causes of unemployment. The second part will assess whyunemployment is a scourge on the labour market in France and Europe.
Explanations about the origins of unemployment are complex and varied. Analysed by major currents of economic thought, unemployment is currently the subject of new theoretical debates that seek to better understand the study of this problem from a better knowledge of the labor market. It is therefore necessary todefine the main explanation of unemployment.
The classics are the difference between nominal wage and real wages (the amount of goods and services that can be bought with nominal wages).
In the classical model, unemployment arises from the individual request of a nominal salary too high. There will be full employment if the candidates know how to ask the right level of pay. That is what the classicscalled voluntary unemployment: employment could develop if workers accept lower real wages.
The neo-classical explanations see another drop in unemployment in the competitive nature of the labor market. Ex: Jacques Rueff (1925) found that the power of British unions and the existence of a system of unemployment compensation make very high nominal wages are too rigid.
For the classics,unemployment is the result of a temporary imbalance. The unemployed who want to work at any price will accept a real wage lower than the previous level. Unemployment is absorbed by lower wages. The market economy is moving back towards full employment, full utilization of production capacity and general market equilibrium.
For classical economists such as A. Smith's "invisible hand of the market" tends toreconcile fully the general interest and special interests. The pursuit of individual interests leads to general satisfaction, well-being of society. In conclusion the market is a process of adjustment between the economic actions of individuals.
Other classical theory, that of “ laissez-faire ": free enterprise and private ownership of means of production are able to ensure greater economicefficiency, more free trade in goods and services ensures full employment.
For the neo-classical, only the decline in real wages (resulting in a decrease in consumption) can promote the recruitment and restore the balance, so the wage flexibility can ensure the balance of labor market.
However, according to the standard the State cannot remedy a situation of unemployment. Any employment policy is...
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