Wednesday, October 24, 2018

Structural Economic Dynamics, Real Wicksell Effects, and the Reverse Substitution of Labor

I have uploaded another working paper:

This article presents an example in which technical progress results in variations in the labor market. Around a switch point with a positive real Wicksell effect, a higher wage is associated with firms wanting to employer more labor per unit output of net product. Around a switch point with a reverse substitution of labor, firms in a particular industry want to hire more labor per unit output of gross product. Technical progress can bring about and take away circumstances favorable for workers wanting to press claims for higher wages.

My research approach can generate fluke switch points. I have decided that such flukes are more interesting when placed in a story about the perturbation of parameters.


Sturai said...

I wonder how would different rate of profits for each industry would affect the region for the Reverse Substitution of Labor. Or a tax on industries that could affect the patterns so we can get a diagram that assures worker's claims on higher salaries being better for employment.

Robert Vienneau said...

Thanks for the comment.

I see how I could combine the technical process modeled in the paper with variations in markups. I'd have to think about how to model taxes. This has been done, I think, but I do not recall the details. Extending this sort of analysis to variation in tax rates sound like an interesting idea.

Sturai said...

I don't know if you have spotted this article:, on differential profit rates. We can see now a trend on Sraffian economics and the "unique" vs "multiple" rates of profit being another example Zambelli in this same issue. I would make a joke saying that for me it seems that the rate of profit is a Dialectical Unit being at the same time one and many. If we take for example multiple rate of profits as exogenous we can solve then for the prices of the commodities. Once we make this we can compute the value of the surplus going to the Capitalist and the value of Total Product. If we divide the former by the later we can get a unique rate of profits. What I wonder is if we then take this unique r and solve for the prices. Do we get the same prices as before? I suppose that generally not. What are this prices? Normal ones? Maybe some kind of the turnpike theorem topic that has being suggested by Schefold.1997 and more recently Yoshihara&Kwak.2018

Just some thoughts