Standard labor market theory is provably false. To cut the meticulous formal derivation short (2015; 2014; 2012), the most elementary version of the correct Employment Law for the economy as a whole is given on Wikimedia AXEC62:
Kakarot-Handtke, E. (2012). Keynes’s Employment Function and the Gratuitous Phillips Curve Disaster. SSRN Working Paper Series, 2130421: 1–19. URL
Kakarot-Handtke, E. (2014). The Three Fatal Mistakes of Yesterday Economics: Profit, I=S, Employment. SSRN Working Paper Series, 2489792: 1–13. URL
Kakarot-Handtke, E. (2015). Major Defects of the Market Economy. SSRN Working Paper Series, 2624350: 1–40. URL
#1 It’s the price mechanism, stupid!.
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