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Entrepreneurial risk and labor's share in output

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  • Cardoso, Renato Fragelli

Abstract

This paper presents a theoretical model which discusses the role played by the entrepreneurial risk on the distribution of the national income. In a two-period general equilibrium framework with competitive risk-averse entrepreneurs it is shown that the highest the risk borne by firms, the lower will be real wages, employment and the labour's share in output. The model helps explain the fall of the labour's share in the Brazilian output during the 1980s.
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Suggested Citation

  • Cardoso, Renato Fragelli, 1997. "Entrepreneurial risk and labor's share in output," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 51(2), April.
    • Handle: RePEc:fgv:epgrbe:v:51:y:1997:i:2:a:689
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    References listed on IDEAS

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    Cited by:

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    2. Sandroni, Alvaro & Werlang, Sérgio Ribeiro da Costa, 1995. "A comment on 'Rational learning lead to nash equilibrium' by professors Ehud Kalai and Ehud Lehrer," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 256, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    3. Ohana, Eduardo Felipe, 1997. "The Brazilian 1994 stabilization plan: an analytical view," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 307, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).

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