The persistence of high unemployment has been one of the most puzzling developments of the past twenty years or so. In the UK, unemployment averaged 2.1% between 1966 and 1973, and since 1974 it has risen to an average of 7.5%. The prevailing view of the persistence of unemployment and of the...

The purpose of this paper is to examine the proposition that capital formation is an important variable in the determination of unemployment and wages in Germany and the U.K. Underlying this proposition is the notion that capital accumulation plays a central role in the adjustment process of an...