Mining Surplus: Modeling James A. Schmitz's Link Between Competition and Productivity
AbstractJames A. Schmitz (2005) documents, in a well-known case study, a dramatic rise in productivity in the U.S. and Canadian iron-ore industry following an increase in competition from Brazil. Prior to the increased competition, the industry was not competitive. Surplus in profits was divided between business and unions. Schmitz attributes the increase in productivity to a change in work practices in the industry, as old negotiated union work rules were abandoned or modified. This research formalizes a mechanism through which a rise in competition can lead to increased productivity in the iron-ore industry.
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Bibliographic InfoPaper provided by Economie d'Avant Garde in its series Economie d'Avant Garde Research Reports with number 22.
Date of creation: Oct 2013
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Web page: http://www.jeremygreenwood.net/EAG.htm
Bodies; effort; James A. Schmitz; iron ore; membership; monopoly profits; Nash bargaining; productivity; unions;
Other versions of this item:
- Jeremy Greenwood & David Weiss, 2013. "Mining Surplus: Modeling James A. Schmitz's Link Between Competition and Productivity," NBER Working Papers 19556, National Bureau of Economic Research, Inc.
- E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
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- James A. Schmitz Jr., 2005.
"What Determines Productivity? Lessons from the Dramatic Recovery of the U.S. and Canadian Iron Ore Industries Following Their Early 1980s Crisis,"
Journal of Political Economy,
University of Chicago Press, vol. 113(3), pages 582-625, June.
- James A. Schmitz, Jr., 2005. "What determines productivity? lessons from the dramatic recovery of the U.S. and Canadian iron-ore industries following their early 1980s crisis," Staff Report 286, Federal Reserve Bank of Minneapolis.
- Thomas J. Holmes & James A. Schmitz, 2010.
"Competition and Productivity: A Review of Evidence,"
Annual Review of Economics,
Annual Reviews, vol. 2(1), pages 619-642, 09.
- Thomas J. Holmes & James A. Schmitz, Jr., 2010. "Competition and productivity: a review of evidence," Staff Report 439, Federal Reserve Bank of Minneapolis.
- Harold L. Cole & Lee E. Ohanian, 2001.
"New Deal policies and the persistence of the Great Depression: a general equilibrium analysis,"
597, Federal Reserve Bank of Minneapolis.
- Harold L. Cole & Lee E. Ohanian, 2004. "New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 779-816, August.
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