Rehn / Meidner model

The Rehn / Meidner model is a model of the labor market that was created by Gosta Rehn and Rudolf Meidner. The basis for the Rehn / Meidner model is that there is a conflict between full employment and low inflation.

The Rehn / Meidner model does not assume that unemployment should be reduced by expansionary fiscal policy since increased demand may increase the inflation. The solution to the problem of unemployment is, in the Rehn / Meidner model, solved by using selective measures.

Rehn and Meidner mean that the total demand should be maintained at a constant level and that labor will be moved from labor markets with unemployment to markets with labor shortages. Labour movement according to the Rehn / Meidner model can be between different industries and different geographical places.