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Una Interpretación del Desempleo en Chile

A high unemployment rate for nearly a decade has led to ample questioning of the capacity of market mechanisms to correct this problem. It is frequently proposed that high unemployment must be counteracted by a more active handling of aggregate demand in harmony with Keynesian theory. The interpretation developed in this study is different. It highlights the influence of the macroeconomic environment in which firms make their decisions on the level of employment. It also underlines the incidence of the cost of credit as an important argument in the function of demand for employment. It is thus concluded that the changes in the relative cost of labor or in the level of production desired by firms will exert a greater or lesser influence on the employment policy of companies, depending on the degree of stability in the economy in general and in the financial market in particular. It is appreciated, in the specific case of the Chilean economy between 1980 and 1986, that the demand for employment did actually respond slightly to changes in real wages, product and real interest rates.