classical unemployment

English - English

Definition of classical unemployment in English English dictionary: According to "classical economic theory" originally developed by Adams, Ricardo, Malthus and others in late 18th century unemployment is explained simply by the real wages being higher than the market-equilibrium wage. In modern economics unemployment is seen as a more complicated phenomenon, and the term classical unemployment is used to refer to the component of overall unemployment caused by too high wage expectations. This kind of situation is suggested to arise e.g. as a result of a too generous minimum wage law or labor union influence
Classical unemployment is the result of real wages being above their market clearing level leading to an excess supply of labour. Geoff Riley, Head of Economics, Eton College, Sept. 2006.; Attributive form of classical unemployment, noun

classical unemployment