Theoretical considerations on the proposed of recovery of purchasing power of the minimum wage in Mexico

Carlos Guerrero de Lizardi () and Leonardo Lomelí Vanegas
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Carlos Guerrero de Lizardi: Universidad Nacional Autónoma de México, México
Leonardo Lomelí Vanegas: Universidad Nacional Autónoma de México, México
Authors registered in the RePEc Author Service: Carlos Guerrero-de-Lizardi

Contaduría y Administración, 2017, vol. 62, issue 3, 972-984

Abstract: Regarding the recent proposal made by the Mexico City Government about the recovery of the purchasing power of the minimum wage, some reflections on the theories of production and distribution are proposed. We first review the seminal paper written by Cobb and Douglas (1928) . Some obstacles in measuring the marginal factor products, and a pair of inconsistencies between the theories of production and distribution on the one hand, and some exercises of quantifying “productivities” on the other hand, are presented. Finally, a model of imperfect competition, which displays the dispute over income between economic agents, is included. One conclusion is that income distribution does not follow a simple rule, but a bargaining process based on market power in a historical context that provides inertia and in which institutions play a key role.

Keywords: Production and distribution theories; Perfect and imperfect competition models; Political economy of distribution. (search for similar items in EconPapers)
JEL-codes: D20 D30 D63 E64 J30 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:nax:conyad:v:62:y:2017:i:3:p:972-984

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