1,721,014 research outputs found
Induced innovation, endogenous technical change and income distribution in a labor-constrained model of classical growth
No full textWe present a steady state analysis of a labor-constrained classical growth model with endogenous direction and intensity of technical change. Firms use retained profits to raise their productive capacity
and to improve labor and capital productivities. Investments are planned to maximize instantaneous profits. Comparative dynamics exercises show that (1) an increase in the saving rate and in R&D
subsidies raises the steady state labor share, labor productivity growth and the employment rate, and (2) a rise in workers’ bargaining power reduces the employment rate while leaving productivity growth and distribution unaffected
'Induced Innovation, Endogenous Growth, and Income Distribution: A Model along Classical Lines'
No full textThis paper presents a classical micro-founded growth model with endogenous direction and size of technical change. In a standard induced
innovation model firms freely adopt productivity improvements from an innovation possibilities frontier describing the trade-off between increasing
capital or labor productivity. The shape of the innovation possibility frontier uniquely determines the steady state distribution of income. The
model proposed allows firms to choose not only the direction but also the size of innovation by making innovation a costly activity requiring R&D
investment. Comparative dynamics analysis shows that income distribution is are sensitive to saving parameters and fiscal policy. In particular,
an increase in the discount factor or in subsidy to R&D raises the labor share
Five Essays on Neoclassical and Neo-Schumpeterian Growth Theory
Full text linkRodano, Giorgio Giannini, Massimo Marchetti, Enric
Average cost and marginal cost pricing in Marshall: Textual analysis and interpretation
No full textThis paper proposes a textual analysis of Marshall's theory of firm pricing behavior under competitive conditions. Average cost and marginal cost pricing theories have very distinct origins as they are rooted, respectively, in the classical and marginalistic theory of competition. I analyze to what extent and under which circumstances the two theories joined in the work of Alfred Marshall; and I argue that, even though only partial evidence can be found to support the adoption of the notion of marginal cost pricing by Marshall, he developed some concepts, such as the distinction between short and long periods and the notion of quasi-rents, which turned out to be fundamental for the joint acceptance of marginal cost and average cost pricing principles by the Marshallian school.Marshall, classical competition, perfect competition, marginal and average cost,
Wealth distribution, elasticity of substitution, and Piketty: an anti-dual Pasinetti economy
No full textThis paper examines the evolution of wealth distribution between
workers and capitalists. It shows that under competitive conditions, and when factors elasticity of substitution is high enough to ensure endogenous growth, capitalistsíshare of total wealth asymptotically tends to one if they have a higher propensity to save than workers. It is also shown that a tax on capital income shifts wealth distribution in workersí favor and makes any level of wealth concentration feasible
Government spending composition, aggregate demand, growth and distribution
Full text linkWe study a demand-driven growth and distribution model with a public sector, both without and with government debt. Government spending is used to finance the accumulation of public capital and to pay wages to public employees. The interaction between public capital and induced technical change makes long-run growth: (i) hump-shaped in the composition of government spending, (ii) wage-led, and (iii) government spending-led. Provided that the interest rate on government bonds is kept sufficiently below the growth rate, the size of government debt is irrelevant for long-run growth.Wir studieren ein Nachfrage-bestimmtes Wachstums- und Verteilungsmodell mit einem öffentlichen Sektor, sowohl mit als auch ohne Staatsschulden. Die Staatsausgaben finanzieren sowohl Akkumulation von öffentlichem Kapital als auch die Löhne von Staatsbediensteten. Die langfristige Wachstumsrate ist durch die Interaktion von technischem Fortschritt und öffentlichem Kapital (i) konkav je nach Zusammensetzung öffentlicher Ausgaben (ii) positiv von der Lohnquote und (iii) positiv vom Volumen der Staatsausgaben abhängig. Vorausgesetzt, dass der auf Staatsanleihen zu zahlende Zinssatz in ausreichendem Maße niedriger ist als die Wachstumsrate, hat die Höhe der Staatsschulden keinerlei Einfluss auf das langfristige Wachstum
Public goods, redistribution, and growth: a classical model
No full textAbstract We extend the basic Classical growth model by introducing a productive and redistributive role for the public sector in an economy populated by two classes, workers (who supply labor, consume, and do not save) and capitalists (who own capital stock, consume and save). The government levies a tax on profits in order to: (i) finance the provision of a public good that augments the production possibilities of the economy, and (ii) integrate labor incomes through a transfer to workers. Following Michl (2009), we focus on two different model `closures', which deliver an endogenous and an exogenous growth rate respectively. In both cases, the analysis of taxation and government spending composition between public goods and transfers requires to specify the government's preferences. In the endogenous growth model, the government's choice fixes long-run growth and income distribution. In the exogenous growth model, policy decisions determine income distribution and the employment rate
Endogenous technical change, employment and distribution in the Goodwin model of the growth cycle
No full textIn this paper, we introduce endogenous technological change through R&D expenditure on labor-augmenting innovation in the cyclical growth model by Goodwin (Goodwin, R. 1967. “A Growth Cycle.” In Socialism, Capitalism, and Economic Growth, edited by Carl Feinstein, Cambridge, UK: Cambridge University Press.). Innovation is a costly, forward-looking process financed out of profits, and pursued by owners of capital stock (capitalists) in order to foster labor productivity and save on labor requirements. Our main findings are: (i) Goodwin-type distributive cycles arise even with dynamic optimization, but (ii) endogenous technical change has a dampening effect on economic fluctuations; (iii) steady state per capita growth, income distribution and employment rate are endogenous, and depend on the capitalists’ discount rate, the institutional variables regulating the labor market, and policy variables such as subsidies to R&D activity. Implementing the model numerically to match long run data for the US, we show that: (iv) an increase in the capitalists’ discount rate lowers per-capita growth, the employment rate and the labor share; (v) an increase in workers’ bargaining strength moderately raises the labor share and moderately decreases per-capita growth, while sharply reducing employment: quarterly US fluctuations (1948–2006) in employment and the labor share seem to support this result; (vi) a balanced budget increase in the R&D subsidy also fosters per-capita growth at the expenses of the labor share, even though the corresponding variations might be small
Centralized wage setting and labor market policies: the nordic model case
Full text linkIt is often argued that rigid labour market and centralized bargaining are harmful employment and growth. This paper looks at the case of Nordic countries as a counter-example pointing to some weaknesses of this view. Rigid labour markets, while reducing the offer of low quality jobs, increase average labor productivity by favoring job relocation in high quality jobs. Moene and Wallerstein (1997) adopted a vintage-capital model to compare centralized and decentralized bargaining: they show that centralized bargaining systems yield higher labor productivity and higher structural unemployment. By introducing a frictional labor market in the vintage-capital framework , we show that the negative effects on employment characterizing centralized bargaining can be reduced by adopting active labor market policy.
Keywords: Centralized wage setting, structural change, labor market policy, frictional unemploymen
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