Capital investment and unemployment in Europe: Neutrality or not?
Productivity variables are often said to have no effect on the NAIRU under wage bargaining as the labour share is unaffected when production is characterised by a unit elasticity of substitution. While production functions such as the CES can explain a negative relationship between investment and equilibrium unemployment, the implication then is that the labour share should increase with investment. In this paper we show that for a long sample in the UK, the labour share has decreased with capital investment. For a panel of European countries for which estimation is possible, the same result is obtained.
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.
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.:
- Philip Arestis & Malcolm Sawyer, 2005.
"Aggregate demand, conflict and capacity in the inflationary process,"
Cambridge Journal of Economics,
Oxford University Press, vol. 29(6), pages 959-974, November.
- Philip Arestis & Malcolm Sawyer, 2003. "Aggregate Demand, Conflict, and Capacity in the Inflationary Process," Economics Working Paper Archive wp_391, Levy Economics Institute.
- Karl Pichelmann & Andreas Ulrich Schuh, 1997. "The NAIRU-Concept: A Few Remarks," OECD Economics Department Working Papers 178, OECD Publishing.
- David Shepherd & Ciaran Driver, 2003. "Inflation and Capacity Constraints in Australian Manufacturing Industry," The Economic Record, The Economic Society of Australia, vol. 79(245), pages 182-195, 06.
- Karanassou, Marika & Snower, Dennis J., 2002.
IZA Discussion Papers
530, Institute for the Study of Labor (IZA).
- Schreiber, Sven & Wolters, Jurgen, 2007. "The long-run Phillips curve revisited: Is the NAIRU framework data-consistent?," Journal of Macroeconomics, Elsevier, vol. 29(2), pages 355-367, June.
- Driver, Ciaran F. & Hall, Stephen G., 2007.
"Production Constraints and the NAIRU,"
Economics Discussion Papers
2007-41, Kiel Institute for the World Economy (IfW).
- Hall, Stephen G. & Driver, Ciaran F., 2008. "Production Constraints and the NAIRU," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 2, pages 1-15.
- Laurence Ball & Robert Moffitt, 2001.
"Productivity Growth and the Phillips Curve,"
Economics Working Paper Archive
450, The Johns Hopkins University,Department of Economics.
- Robert J. Flanagan, 1999. "Macroeconomic Performance and Collective Bargaining: An International Perspective," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1150-1175, September.
- Madsen, Jakob B, 1998. "General Equilibrium Macroeconomic Models of Unemployment: Can They Explain the Unemployment Path in the OECD?," Economic Journal, Royal Economic Society, vol. 108(448), pages 850-67, May.
- Maddala, G S & Wu, Shaowen, 1999. " A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-52, Special I.
- Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002.
"Unit root tests in panel data: asymptotic and finite-sample properties,"
Journal of Econometrics,
Elsevier, vol. 108(1), pages 1-24, May.
- Tom Doan, . "LEVINLIN: RATS procedure to perform Levin-Lin-Chu test for unit roots in panel data," Statistical Software Components RTS00242, Boston College Department of Economics.
- Rowthorn, Robert, 1995. "Capital Formation and Unemployment," Oxford Review of Economic Policy, Oxford University Press, vol. 11(1), pages 26-39, Spring.
- Edmond Malinvaud, 2000.
"The Role of Structural Policies Meant to Promote Employment,"
Rivista di Politica Economica,
SIPI Spa, vol. 90(6), November-.
- Edmond Malinvaud, 2001. "The Role of Structural Policies Meant to Promote Employment," 'Angelo Costa' Lectures Serie, SIPI Spa, issue Lect. II.
- Layard, Richard & Nickell, Stephen & Jackman, Richard, 1991.
"Unemployment: Macroeconomic Performance and the Labour Market,"
Oxford University Press, number 9780198284345, May.
- Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, May.
- Rowthorn, Robert, 1999. "Unemployment, Wage Bargaining and Capital-Labour Substitution," Cambridge Journal of Economics, Oxford University Press, vol. 23(4), pages 413-25, July.
- Pasaran, M.H. & Im, K.S. & Shin, Y., 1995.
"Testing for Unit Roots in Heterogeneous Panels,"
Cambridge Working Papers in Economics
9526, Faculty of Economics, University of Cambridge.
- Engelbert Stockhammer, 2004.
"Financialisation and the slowdown of accumulation,"
Cambridge Journal of Economics,
Oxford University Press, vol. 28(5), pages 719-741, September.
When requesting a correction, please mention this item's handle: RePEc:eee:jmacro:v:32:y:2010:i:1:p:492-496. 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: (Zhang, Lei)
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.