IDEAS home Printed from https://ideas.repec.org/a/iab/iabmit/v1997i4p721-731.html
   My bibliography  Save this article

Die Interdependenz von Produkt- und Arbeitsmärkten : die Wirtschafts- und Beschäftigungsentwicklung der Industrieländer aus der Produktmarktperspektive (The interdependence of product markets and labour markets : the economic development and employment trend of the industrial countries from the product market perspective.)

Author

Listed:
  • Schettkat, Ronald

Abstract

"The article takes up a taboo subject in the field of economic sciences. It poses the question as to whether market saturation in individual product markets brought about the flagging economic dynamism and thus may be the cause of the income and labour market problems. The question arises as to whether Schumpeter's dynamic theory of economic development can explain the present situation in the 'industrial countries' as well as its 'golden age' of the 1950s and 1960s. Schumpeter explained economic upswing and downswing phases by the creation of new products and their finite life cycle. With 'old' products, market saturation occurs, which slows down the economic dynamism. This article discusses whether Schumpeter's 'product market perspective' is compatible with the economic development of the 'industrial countries', which is characterised by decreasing employment in industry and increasing employment in the service sector. Are the labour market and income problems in the 'industrial countries' the result of product market developments? Can market saturation in industrial products and the cost disease in services explain the trade-off between gains in employment and gains in productivity which can be observed in international comparison? In a dynamic economy, full employment requires an exact balance of employment-creating effects in expanding markets and employment-destroying effects in shrinking markets. If the creation of new product markets lags behind the destruction of old product markets, the result is Schumpeter's stagnation; then unemployment occurs. Needs are often regarded as inexhaustible - which perhaps they really are - , but this is certainly not true for all products. In the debate concerning saturation phenomena one can even refer to the founder of economic sciences, Adam Smith, who predicted saturation in agricultural products - quite a daring thesis in the 18th century- but who could not imagine saturation in industrial commodities - not a particularly surprising point of view in the 18th century. Even though Adam Smith was right in this respect for some 200 years, there are clear indications in the 'industrial countries' that the production of industrial commodities is now only expanding underproportionally to the gains in productivity, which can be seen in falling employment figures. Employment growth is taking place in the service sector. Product market developments can not only explain the sectoral employment developments well; they also explain the intensification of competition which is being lamented everywhere. The 'product market perspective' is seen as an alternative or at least as an addition to traditional explanations of unemployment - such as external shocks, labour market rigidities etc." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Schettkat, Ronald, 1997. "Die Interdependenz von Produkt- und Arbeitsmärkten : die Wirtschafts- und Beschäftigungsentwicklung der Industrieländer aus der Produktmarktperspektive (The interdependence of product markets and labo," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 30(4), pages 721-731.
  • Handle: RePEc:iab:iabmit:v:1997:i:4:p:721-731
    as

    Download full text from publisher

    File URL: http://doku.iab.de/mittab/1997/1997_4_MittAB_Schettkat1.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Nathalie Greenan & Dominique Guellec, 2000. "Technological Innovation and Employment Reallocation," LABOUR, CEIS, vol. 14(4), pages 547-590, December.
    2. Petit, Pascal, 1993. "Employment and technical change," CEPREMAP Working Papers (Couverture Orange) 9330, CEPREMAP.
    3. Göggelmann, Klaus & Franz, Wolfgang & Winker, Peter, 1997. "Einige Wirkungen von steuerlichen Umfinanzierungsmaßnahmen in einem makroökonometrischen Ungleichgewichtsmodell für die westdeutsche Volkswirtschaft," ZEW Discussion Papers 97-19, ZEW - Leibniz Centre for European Economic Research.
    Full references (including those not matched with items on IDEAS)

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iab:iabmit:v:1997:i:4:p:721-731. 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: (IAB, Geschäftsbereich Dokumentation und Bibliothek). General contact details of provider: http://edirc.repec.org/data/iabbbde.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.