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Can Market Power influence Employment, Wage Inequality and Growth?

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  • Alberto BUCCI

    ([n.a.])

  • Fabio FIORILLO

    ()
    (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)

  • Stefano STAFFOLANI

    ()
    (Universita' Politecnica delle Marche, Dipartimento di Economia)

Abstract

We introduce an efficiency-wage mechanism into an innovation-driven growth model. Due to informational problems, the labour market is segmented and homogeneous workers may be employed either in a non-competitive intermediate sector or in a competitive research one. We analyse the impact that variations in the monopoly power of the intermediate firms may have on unemployment, wage inequality and growth. We find that the lower the product market competition in the intermediate sector, the higher the research employment, the lower the intermediate sector employment, the higher the aggregate growth rate. Growth and inequality are negatively correlated whereas growth and unemployment are positively correlated. The last two results are obtained through numerical simulations.

(This abstract was borrowed from another version of this item.)

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Bibliographic Info

Paper provided by Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali in its series Working Papers with number 141.

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Length: 21
Date of creation: Oct 2000
Date of revision:
Handle: RePEc:anc:wpaper:141

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Keywords: efficiency wages; endogenous growth; market power; research and development;

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References

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  16. Fabio FIORILLO & Stefano STAFFOLANI, 2000. "To redistribute or not? Unemployment benefit, workfare and citizen's income in a dual labour market," Working Papers 128, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
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  22. Nickell, Stephen J, 1996. "Competition and Corporate Performance," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 724-46, August.
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Citations

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Cited by:
  1. Stefania BUSSOLETTI & Roberto ESPOSTI, 2004. "Regional Convergence, Structural Funds and the Role of Agricolture in the EU. A Panel-Data Approach," Working Papers 220, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  2. Ugo FRATESI, 2003. "Innovation Diffusion and the Evolution of Regional Disparities," Working Papers 186, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  3. Marcello MESSORI & Alberto ZAZZARO, 2004. "Monetary profits within the circuit: Ponzi finance oer "mors tua, vita mea"?," Working Papers 200, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  4. Renato BALDUCCI & Stefano STAFFOLANI, 2003. "Short-Run Bargaining, Factors Shares and Growth," Working Papers 188, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  5. Elvio MATTIOLI, 2003. "The measurement of coherence in the evaluation of criteria and its effects or ranking problems illustrated using a multicriteria decision method," Working Papers 199, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  6. Nicola MATTEUCCI & Alessandro STERLACCHINI, 2003. "ICT and Employment Growth in Italian Industries," Working Papers 193, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.

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