Schumpeterian Restructuring

Patrick Francois () and Huw Lloyd-Ellis

No 273509, Queen's Economics Department Working Papers from Queen's University - Department of Economics

Abstract: We develop a Shumpeterian theory of business cycles that relates job creation, job destruction and wages over the cycle to the processes of firm restructuring, innovation and implementation that drive long—run growth. Due to incentive problems, production workers are employed via relational contracts and experience involuntary unemployment. Job destruction and firm turnover are counter—cyclical, but labour productivity growth and job creation are procyclical. Endogenous fluctuations in job creation on the intensive margin are the dominant source of changes in employment growth. Our framework also highlights the countercyclical forces on wages due to restructuring, and illustrates the relationship between the cyclicality of wages and long—run productivity growth.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 48
Date: 2005-07
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/273509/files/qed_wp_1039.pdf (application/pdf)

Related works:
Working Paper: Schumpeterian Restructuring (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:quedwp:273509

DOI: 10.22004/ag.econ.273509

Access Statistics for this paper

More papers in Queen's Economics Department Working Papers from Queen's University - Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().