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Contracting Productivity Growth Author info | Abstract | Publisher info | Download info | Related research | Statistics Patrick Francois
Joanne Roberts
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In this paper, we analyze the interactions between growth and the contracting environment in the production sector. Allowing incompleteness in contracting implies that viable production relationships for firms and workers, and therefore the profitability of industries, depend on the rates of innovation and growth. The speed at which new innovations arrive in turn depends on the profitability of production, for the usual reasons examined in the endogenous growth literature. We show that these interactions can have important implications which are consistent with observed phenomena in both the micro and macro environment. In particular, we demonstrate how this interaction can lead to a productivity slowdown and a shift in labour market contracts toward more short term arrangements. We show the consistency of an increase in the proportion of the labour force under short term employment, unchanged turnover, increased relative returns of workers in high productivity sectors, and increased income inequality, with a productivity slowdown of finite duration.
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Paper provided by University of Toronto, Department of Economics in its series Working Papers with number
jorob-99-02.
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Length: 34 pages
Date of creation: 11 Jun 2000Date of revision:
Handle: RePEc:tor:tecipa:jorob-99-02Contact details of provider: Postal: 150 St. George Street, Toronto, Ontario Phone: (416) 978-5283 Fax: (416) 978-6713
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Keywords: Endogenous Growth ; Incomplete Contracting ; Other versions of this item:
Find related papers by JEL classification: O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D
This paper has been announced in the following NEP Reports :
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