Structural economic dynamics, markups, real Wicksell effects, and the reverse substitution of labor

Robert L. Vienneau

Structural Change and Economic Dynamics, 2019, vol. 50, issue C, 216-226

Abstract: This article presents an example in which perturbations in relative markups and technical progress result in variations in characteristics of the labor market. Around a switch point with a positive real Wicksell effect, a higher wage is associated with firms wanting to employ 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 and variations in markups can bring about and take away circumstances favorable for workers wanting to press claims for higher wages. This article presents specific fluke switch points in which variations in technology and markups change these circumstances, as well as novel diagrams for visualizing the effects of such variations.

Keywords: Cambridge capital controversy; Labor market; Markup pricing (search for similar items in EconPapers)
JEL-codes: B51 D33 D43 J21 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:50:y:2019:i:c:p:216-226

DOI: 10.1016/j.strueco.2019.07.008

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