Soto Torres, M. D. with R. Fernández Lechón, "Employment Policy and Expectations", 1986
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The paper studies with the help of a model the employment decisions of a firm through a business cycle which maximizes its discounted income and assumes that the forecasts are perfectly corred.The firm produces a output function of number of workers employed by the firm at time t. The firm's labor force increases over time as a result of layoffs and quits. The firm can recalls workers at time t only if it has an inventory of previonsly laid off workers. The firm's output is supposed superior or equal to demand (function of price and time) at any time. The solution to the maximization problem will then yield an optimal output and employment plan which the firm proceeds to implement until its expectations about demand at time t.