Unemployment, Factor Substitution and Capital Formation
We incorporate a wage-bargaining structure in a dynamic general equilibrium model and show how this feature changes short- and long-run properties of equilibria compared with a perfectly competitive setting. We discuss how employment, capital and income shares respond to wage-setting shocks and show that adjustment dynamics depend decisively on the magnitude of the elasticity of substitution between labour and capital. Values of the elasticity below unity add persistence, tend to preserve stability and lead to empirically plausible adjustment patterns. By contrast, values above unity introduce additional volatility, thereby making steady states potentially unstable. Copyright Verein für Socialpolitik and Blackwell Publishing Ltd 2003.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 4 (2003)
Issue (Month): (November)
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=1465-6485|
More information through EDIRC
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=1465-6485|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Daron Acemoglu, 2000.
"Labor- and Capital- Augmenting Technical Change,"
NBER Working Papers
7544, National Bureau of Economic Research, Inc.
- Samuel Bentolila & Gilles Saint Paul, 1999.
"Explaining movements in the labor share,"
Economics Working Papers
374, Department of Economics and Business, Universitat Pompeu Fabra.
- Benassy, Jean-Pascal, 1997. " Imperfect Competition, Capital Shortages and Unemployment Persistence," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(1), pages 15-27, March.
- Grandmont, Jean-Michel & Pintus, Patrick & de Vilder, Robin, 1998.
"Capital-Labor Substitution and Competitive Nonlinear Endogenous Business Cycles,"
Journal of Economic Theory,
Elsevier, vol. 80(1), pages 14-59, May.
- Jean-Michel Grandmont & P, A, Pintus & R, De Vilder, 1997. "Capital-Labor Substitution and Competitive Nonlinear Endogenous Business Cycles," Working Papers 97-28, Centre de Recherche en Economie et Statistique.
- GRANDMONT, Jean-Michel & PINTUS, Patrick & de VILDER, Robin, 1997. "Capital-labor substitution and competitive nonlinear endogenous business cycles," CORE Discussion Papers 1997087, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Michael Burda, 1988. "Is there a capital shortage in Europe?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 124(1), pages 38-57, March.
- Christopher Pissarides, 1997.
"The impact of employment tax cuts on unemployment and wages : the role of unemployment benefits and tax structure,"
LSE Research Online Documents on Economics
2332, London School of Economics and Political Science, LSE Library.
- Pissarides, Christopher A., 1998. "The impact of employment tax cuts on unemployment and wages; The role of unemployment benefits and tax structure," European Economic Review, Elsevier, vol. 42(1), pages 155-183, January.
- Christopher A. Pissarides, 1997. "The Impact of Employment Tax Cuts on Unemployment and Wages: The Role of Unemployment Benefits and Tax Structure," CEP Discussion Papers dp0361, Centre for Economic Performance, LSE.
- Kaas, Leo & Leopold von Thadden, 2002.
"Budgetary Policy and Unemployment Dynamics,"
Royal Economic Society Annual Conference 2002
108, Royal Economic Society.
- Leo Kaas & Leopold von Thadden, 2001. "Budgetary Policy and Unemployment Dynamics," Vienna Economics Papers 0104, University of Vienna, Department of Economics.
- von Thadden, Leopold & Kaas, Leo, 2001. "Budgetary Policy and Unemployment Dynamics," Discussion Paper Series 1: Economic Studies 2001,07, Deutsche Bundesbank, Research Centre.
- Gregory W. Huffman, 1993.
"An alternative neo-classical growth model with close-form decision rules,"
9317, Federal Reserve Bank of Dallas.
- Huffman, Gregory W., 1993. "An alternative neo-classical growth model with closed-form decision rules," Economics Letters, Elsevier, vol. 42(1), pages 59-63.
- E. Yndgaard & Palle S. Andersen & Marc Klau, 1999. "Higher profits and lower capital prices: is factor allocation optimal?," BIS Working Papers 65, Bank for International Settlements.
- Blanchard, Olivier, 1998.
"Revisiting European Unemployment : Unemployment, Capital Accumulation and Factor Prices,"
Economic and Social Research Institute (ESRI), number GL28.
- Olivier Blanchard, 1998. "Revisiting European Unemployment: Unemployment, Capital Accumulation, and Factor Prices," NBER Working Papers 6566, National Bureau of Economic Research, Inc.
- Jones, Larry E. & Manuelli, Rodolfo E., 1992.
"Finite lifetimes and growth,"
Journal of Economic Theory,
Elsevier, vol. 58(2), pages 171-197, December.
- Oswald, Andrew J, 1985. " The Economic Theory of Trade Unions: An Introductory Survey," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(2), pages 160-93.
- Grandmont Jean-michel, 1983.
"On endogenous competitive business cycles,"
CEPREMAP Working Papers (Couverture Orange)
- Claus Hansen, 1999. "Long-run impact of increased wage pressure," Journal of Economics, Springer, vol. 69(2), pages 141-157, June.
- McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
When requesting a correction, please mention this item's handle: RePEc:bla:germec:v:4:y:2003:i::p:475-495. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.