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Theoretical considerations on the proposed of recovery of purchasing power of the minimum wage in Mexico

Author

Listed:
  • Carlos Guerrero de Lizardi

    (Universidad Nacional Autónoma de México, México)

  • Leonardo Lomelí Vanegas

    (Universidad Nacional Autónoma de México, México)

Abstract

Regarding the recent proposal made by the Mexico City Government about the recovery of the purchasing power of the minimum wage, some reflections on the theories of production and distribution are proposed. We first review the seminal paper written by Cobb and Douglas (1928) . Some obstacles in measuring the marginal factor products, and a pair of inconsistencies between the theories of production and distribution on the one hand, and some exercises of quantifying “productivities” on the other hand, are presented. Finally, a model of imperfect competition, which displays the dispute over income between economic agents, is included. One conclusion is that income distribution does not follow a simple rule, but a bargaining process based on market power in a historical context that provides inertia and in which institutions play a key role.

Suggested Citation

  • Carlos Guerrero de Lizardi & Leonardo Lomelí Vanegas, 2017. "Theoretical considerations on the proposed of recovery of purchasing power of the minimum wage in Mexico," Contaduría y Administración, Accounting and Management, vol. 62(3), pages 972-984, Julio-Sep.
    • Handle: RePEc:nax:conyad:v:62:y:2017:i:3:p:972-984
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    References listed on IDEAS

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    1. Guerrero de Lizardi, Carlos, 2009. "Determinantes económicos del salario mínimo en países pequeños y abiertos: una aplicación para Centroamérica," Estudios y Perspectivas – Sede Subregional de la CEPAL en México 4897, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    2. Robert A. Pollak, 1998. "The Consumer Price Index: A Research Agenda and Three Proposals," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 69-78, Winter.
    3. Carlos Guerrero de Lizardi, 2010. "Alternative Consumer Price Indexes for Mexico," CID Working Papers 42, Center for International Development at Harvard University.
    4. Guerrero-de Lizardi, Carlos., 2011. "Determinantes económicos de las remuneraciones en las manufacturas mexicanas," Panorama Económico, Escuela Superior de Economía, Instituto Politécnico Nacional, vol. 0(12), pages 41-56, primer se.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Production and distribution theories; Perfect and imperfect competition models; Political economy of distribution.;
    All these keywords.

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • D30 - Microeconomics - - Distribution - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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