Business Cycles and the Invisible Hand

2020 ◽  
Author(s):  
Vipin P. Veetil
Keyword(s):  
Business Cycles ◽  
Invisible Hand ◽  
The Invisible

The Fundamental Surplus

2017 ◽  
Vol 107 (9) ◽  
pp. 2630-2665 ◽  
Author(s):  
Lars Ljungqvist ◽  
Thomas J. Sargent
Keyword(s):  
Welfare State ◽  
Business Cycles ◽  
Upper Bound ◽  
Wage Bargaining ◽  
Invisible Hand ◽  
Common Channel ◽  
Entire Class ◽  
Unemployment Compensation ◽  
Matching Models ◽  
The Invisible

To generate big responses of unemployment to productivity changes, researchers have reconfigured matching models in various ways: by elevating the utility of leisure, by making wages sticky, by assuming alternating-offer wage bargaining, by introducing costly acquisition of credit, by assuming fixed matching costs, or by positing government-mandated unemployment compensation and layoff costs. All of these redesigned matching models increase responses of unemployment to movements in productivity by diminishing the fundamental surplus fraction, an upper bound on the fraction of a job's output that the invisible hand can allocate to vacancy creation. Business cycles and welfare state dynamics of an entire class of reconfigured matching models all operate through this common channel. (JEL E23, E24, E32, J24, J31, J41, J63)

The Invisible Hand and the Cunning of Reason

2017 ◽  
Author(s):  
Edna Ullmann-Margalit
Keyword(s):  
Invisible Hand ◽  
The Invisible

The idea of the invisible hand has had an impact not only on the eighteenth and the nineteenth centuries but on the twentieth and twenty-first centuries as well, and it has had a curious ideological career: in previous centuries it had been used to promote ideals of secular, enlightened progress, while in the twentieth and the twenty-first, it is used inversely to promote conservative reverence toward traditions. There are two main models for invisible-hand explanations, and the current, inverse, ideological use of the idea of the invisible hand by conservative circles as against liberals and social planners springs from not distinguishing between the two models.

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