This paper explains inflation and unemployment starting from new baseline models of price formation and labor demand. Inflation is always and everywhere a pricing phenomenon. Unemployment is every year determined as a residual, as people in the labor force without employment. Employment is determined by production and labor productivity, while production is determined by spending (as measured by nominal GDP) at prices set by firms.

This paper shows that the neoclassical model of labor demand in a firm is incomplete and that the determinants of labor demand in a complete model include the demand for the firm’s output but not the real wage.

This paper shows how matching problems reduce employment – and hence also raise unemployment – by creating a gap between labour demand and employment. It also shows how this gap can be measured by unfilled jobs (unmet demand) as distinct from job vacancies (recruitment processes) and reports results from a vacancy survey which measures both. In fact, while a shift of the matching function indicating longer recruitment times suggests increasing matching problems, it is only the measurement of unfilled jobs which can verify this and at the same time quantify the effect on unemployment.

Denna artikel kompletterar några centrala teorier i dagens läroböcker i mak­roekonomi med mikroekonomiska grunder. Distinktionen mellan kort sikt och medellång sikt diskuteras också, liksom effekten av matchningsproblem på arbetslöshet. Och vi ska se vad som döljer sig bakom begreppet jämviktsarbets­löshet.

Denna artikel presenterar en modell av företags prissättning och efterfrågan på arbetskraft som gör det enklare att förstå lönebildningen och dess relation till inflation och arbetslöshet. Modellen gör det dessutom enklare att förstå hur lönenivån utvecklas genom lönenormering av en löneledande sektor – och vilka sektorer som bör ha inflytande på normbildningen och varför.

This article offers a theory of pricing in consumer markets that relates cost-plus pricing and value-based pricing to price competition and price leadership, including, in particular, competitive price leadership as defined by Kenneth Boulding. It also argues that the basic question in Keynesian economics is why firms choose prices such that production is restricted by sales, not why prices, once chosen, can be “sticky.” And finally it shows that a firm’s labor demand depends on its sales at the price it sets and not on its “real wage.”

Hur kan studenter få hjälp med att förankra nationalekonomins begrepp och modeller i verkligheten? Förslagsvis genom en introduktion som motsvarar läkarutbildningens inledande kurs i anatomi. Jag föreslår närmare bestämt att grundutbildningen i nationalekonomi inleds med en faktakurs, dvs en kurs som förmedlar grundläggande fakta om en marknadsekonomis institutioner och funktionssätt. Denna artikel ger några exempel på vad en sådan kurs kan innehålla, nämligen grundläggande fakta om marknadsformer och prisbildning, särskilt prisbildningen på marknader för konsumtionsvaror, samt grundläggande fakta om pengar, banker och räntor. Distinktionen mellan fakta, approximationer och teorier diskuteras särskilt.

This is an introduction to money and the workings of the financial system. The creation of money is discussed in detail in Chapter 1. Chapter 2 explains how international payments can add to money creation but also generate a new type of money, usually called Eurodollars. Basic securities are defined and characterized in Chapter 3, namely bills, bonds and shares, but basic derivatives, like futures, swaps, and options, are also discussed. Chapter 4 deals with pricing by banks when extending loans, but also with price formation in markets for securities. Chapter 5 surveys possible threats to the financial system and discusses three different approaches to the problem of stabilizing it, namely crisis management, regulation, and structural reforms.

This paper shows that the traditional model of labour demand in a firm is incomplete and that the determinants of labour demand in a complete model include the demand for the firm’s products but not the real wage.