Wages and productivity growth in a competitive industry
AbstractOur model studies the evolution of productivity growth in a competitive industry. The exogenous wage rate determines the firms' engagement in labour productivity enhancing process innovation. There is a unique steady state of the industry dynamics, which is globally stable. In the steady state, the number of active firms, their unit labour cost and supply depend on the growth rate but not on the level of the wage rate. In addition to providing comparative statics of the steady state, the paper characterizes the industry's adjustment path.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Theory.
Volume (Year): 109 (2003)
Issue (Month): 1 (March)
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Web page: http://www.elsevier.com/locate/inca/622869
Other versions of this item:
- Helmut Bester & Emmanuel Petrakis, . "Wages and Productivity Growth in a Competitive Industry," Papers 009, Departmental Working Papers.
- Bester, Helmut & Petrakis, Emmanuel, 1998. "Wages and Productivity Growth in a Competitive Industry," CEPR Discussion Papers 2031, C.E.P.R. Discussion Papers.
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- D41 - Microeconomics - - Market Structure and Pricing - - - Perfect Competition
- D92 - Microeconomics - - Intertemporal Choice - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
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