 Productivity, private and public capital, and real wage in the USS. J. Erenburg Applied Economics Letters, 1998, vol. 5, issue 8, 491-495 Abstract: This paper examines the relationship between real wages and productivity in the United States from 1948-90, by including in the measure of productivity the impact of public capital as well as private capital. The results confirm recent studies that have indicated that when the private and public capital stock is controlled for, real wage is countercyclical, and validate diminishing returns to labour, positive returns to public capital and a procyclical effect of capacity utilization on real wage. Further, the issue of spurious regression bias that arises when variables are nonstationary was addressed, and long run relationships were then estimated. Results establish a long-run relationship between productivity, real wage, the employment to capital ratio, and public to private capital ratio. Using the statistical estimates herein, if the public capital stock had remained at the historical 1948-65 ratio, rather than declining, productivity would have been between 2.4 and 2.9 percentage points higher and real wages would have been between 2 to 2.8 percentage points higher, ceteris paribus. Date: 1998 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:apeclt:v:5:y:1998:i:8:p:491-495 Ordering information: This journal article can be ordered from Access Statistics for this article Applied Economics Letters is currently edited by Anita Phillips More articles in Applied Economics Letters from Taylor & Francis Journals |
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