Tavani, Daniele (2009): Wage Bargaining and Induced Technical Change in a Linear Economy: Model and Application to the US (1963-2003).
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In a simple one-sector, two-class, fixed-proportions economy, wages are set through axiomatic bargaining a la Nash . As for choice of technology, firms choose the direction of factor augmentations to maximize the rate of unit cost reduction (Kennedy , and more recently Funk ). The aggregate environment resulting by self-interested decisions made by economic agents is described by a two-dimensional dynamical system in the employment rate and output/capital ratio. The economy converges cyclically to a long-run equilibrium involving a Harrod-neutral prole of technical change, a constant rate of employment of labor, and constant input shares. The type of oscillations predicted by the model matches the available data on the United States (1963-2003). Finally, institutional change, as captured by variations in workers' bargaining power, has a positive effect on the rate of output growth but a negative effect on employment.
|Item Type:||MPRA Paper|
|Original Title:||Wage Bargaining and Induced Technical Change in a Linear Economy: Model and Application to the US (1963-2003)|
|Keywords:||Bargaining; Induced Technical Change; Factor Shares; Employment|
|Subjects:||E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E25 - Aggregate Factor Income Distribution
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E24 - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J52 - Dispute Resolution: Strikes, Arbitration, and Mediation; Collective Bargaining
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives
|Depositing User:||Daniele Tavani|
|Date Deposited:||14. Apr 2009 06:32|
|Last Modified:||19. Feb 2013 08:29|
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