Research On Theoretic Model Of Long-run And Aggregate Unemployment

About the problem of labor market clearing, three hypotheses were formed in the history of labor economic theory. The first is labor market clearing theory which was. represented by classical economics and neoclassical economics general equilibrium theory. This theory set up mature theoretical model, but it can't explain the phenomenon of large amount unemployment existed in real economies. The second is obstructive labor market unclearing theory which was represented by Keynesian cyclical unemployment theory and Friedam's natural unemployment theory. If there is no any flaw in labor market, tabor market can clear. That was the basic theoretical thought of these two hypotheses. But in real economies some flaws exist in labor market and labor market can't clear. Keynes attributed market flaws to insufficient effective demand, and Friedam attributed market flaws to structural mismatch. Based on labor market clearing, these theories extended labor market clearing theory, they may explain short-term total-amount unemployment, may explain long-run structural unemployment, but they can't explain long-run total-amount unemployment on the condition that flaws don't exist in labor market. The third is original labor market unclearing theory which was represented by Marx's relative surplus population theory. The basic theoretical thought of this hypothesis is that labor supply and labor demand are two independent variables and market mechanism can't clear labor market, unclearing is a original situation in labor market. This theory not only can be compatible with obstructivelabor market unclearing theory but also can explain the involuntary unemployment phenomenon on the condition that market mechanism doesn't have flaws in labor market, but it didn't yet fully and perfectly explain the mechanism of labor supply and labor demand changing independently. The work this article will do is to revise neoclassical theoretical model to explain the mechanism of labor supply and labor demand changing independently and construct long-run total-amount unemployment model.On the basis of absorbing former research achievements, in neoclassical theory model framework this article with the guidance of Marx's economic theory use aggregate analysis, long-run analysis, marginal analysis and construct long-run total-amount unemployment theory model. Through researching the following achievements was obtained:Firstly, explained the determinant mechanism of minimum full employment size. Full employment size is labor supply size, labor supply quantity is determined by labor force storage quantity and labor force participation rate. Labor force storage quantity is exogenous, labor force participation rate is adjusted by wage level. Subsistence wage, which is the lowest wage level, is determined by exogenous factors. Labor force participation rate determined by subsistence wage and the lowest labor force participation rate are exogenous. The article combined the exogenous population producing with the exogenous lowest labor force participation rate and drew a conclusion that in contrast to labor demand quantity, minimum full employment size is exogenous.Secondly, explained the determinant mechanism of latent employment size. Under the condition of perfect competition market, latent employment size is labor demand size according to profit maximum principle. Latent employment size is limited by two sides, the first side is 4abor supply quantity, the second side is the intersection of labor marginal cost and marginal revenue. By introducing natural resource endowment and consumer's preference, the article drew a conclusion that the intersection of labor marginal cost and marginal revenue existed not only in the short term but also in the long term and in the longer -term. Between the two sides, the shorter side limit the latent employment size. If the second side is the shorter side, latent employment size will separate from full employment size and exist independently.Thirdly, made preliminary theoretical depiction for long-run total-amount unemployment. 1. Put forward two methods, "surplus" and "difference" to measure long-run total-amount unemployment; 2.Analyzed the two existence forms of long-run total-amount, the one is open, the other is disguised; 3. Discuss the economic consequence of long-run total-amount unemployment and hysteresis in unemployment; 4. Made clear the relation between long-run total-amount unemployment model and other unemployment models.Fourthly, put forward the basic thought of long-run total-amount unemployment treatment. In order to treat long-run total-amount unemployment we should make latent unemployment size and full employment identity, we can carry out from two aspects .On the one hand,reduce full employment size; On the other hand, expand latent employment size.