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Do Rising Real Wages Increase The Rate Of Labor-Saving Technical Change? Some Econometric Evidence

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  • Adalmir Marquetti

Abstract

The long-run relationship between real wages and labor productivity is investigated using cointegration and Granger non-causality tests for the US economy over the period 1869-1999. The series are cointegrated, indicating that there is a link between real wages and labor productivity in the long run. Granger non-causality tests support unidirectional causation from real wages to labor productivity. This outcome corroborates the conception that increases in real wages drive profit-seeking capitalists to raise labor productivity as their main weapon in defending their profitability. This result is consistent with a long tradition among economists that perceives technical change as being biased toward labor-saving. Copyright Blackwell Publishing Ltd 2004.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Metroeconomica.

Volume (Year): 55 (2004)
Issue (Month): 4 (November)
Pages: 432-441

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Handle: RePEc:bla:metroe:v:55:y:2004:i:4:p:432-441

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Cited by:
  1. Carmem Feijo & Marcos Tostes Lamonica & Jose Luis Oreiro, 2011. "A Model Of Capital Accumulation Withexternal Restriction And Structural Change: Theory And The Brazilianexperience," Anais do XXXVIII Encontro Nacional de Economia [Proceedings of the 38th Brazilian Economics Meeting] 013, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  2. Storm, Servaas & Naastepad, C.W.M, 2012. "Wage-led or profit-led supply : wages, productivity and investment," ILO Working Papers 470930, International Labour Organization.
  3. Stephanie Seguino, 2005. "Is More Mobility Good? Firm Mobility and the Low Wage -- Low Productivity Trap," Economics Working Paper Archive wp_423, Levy Economics Institute.
  4. Hiroaki Sasaki, 2013. "Cyclical growth in a Goodwin–Kalecki–Marx model," Journal of Economics, Springer, vol. 108(2), pages 145-171, March.
  5. Hein, Eckhard, 2011. "Distribution, 'financialisation' and the financial and economic crisis: Implications for post-crisis economic policies," IPE Working Papers 09/2011, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
  6. Hein, Eckhard, 2009. "‘Financialisation’, distribution, capital accumulation and productivity growth in a Post-Kaleckian model," MPRA Paper 18574, University Library of Munich, Germany.
  7. Stephanie Seguino & Caren Grown, 2006. "Gender equity and globalization: macroeconomic policy for developing countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(8), pages 1081-1104.
  8. Eckhard Hein & Artur Tarassow, 2010. "Distribution, aggregate demand and productivity growth: theory and empirical results for six OECD countries based on a post-Kaleckian model," Cambridge Journal of Economics, Oxford University Press, vol. 34(4), pages 727-754.
  9. Amitava Krishna Dutt, 2006. "Aggregate Demand, Aggregate Supply and Economic Growth," International Review of Applied Economics, Taylor & Francis Journals, vol. 20(3), pages 319-336.
  10. Sasaki, Hiroaki, 2012. "Is the long-run equilibrium wage-led or profit-led? A Kaleckian approach," Structural Change and Economic Dynamics, Elsevier, vol. 23(3), pages 231-244.
  11. Marcos Tostes Lamonica & Carmem Aparecida Feijo, 2013. "A Kaldorian approach to catch up and structural change in economies with high degree of heterogeneity," PSL Quarterly Review, Economia civile, vol. 66(265), pages 107-135.
  12. Stephanie Seguino, 2005. "All types of inequality are not created equal: divergent impacts of inequality on economic growth," Working Papers 10, ECINEQ, Society for the Study of Economic Inequality, revised Oct 2005.

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