The wage-wage-...-wage-profit relation in a multisector bargaining economy
The equalization of profit rates across a multisector production economy subject to Nash bargaining over wages supports an industry wage structure like those that account for a large fraction of actual wage dispersion and a wage-wage-...-wage-profit surface on which the general profit rate can vary inversely or directly with the wage paid in a given industry. Institutional changes that compress or decompress the wage distribution depend for support on industrially specific cross-class coalitions of workers and capitalists. Technical changes that raise capitalists' profits in current prices can lower the equilibrium profit rate.
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- Arai, Mahmood, 1999.
"Wages, Profits and Capital Intensity: Evidence from Matched Worker-Firm Data,"
Research Papers in Economics
1999:3, Stockholm University, Department of Economics.
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