Money wages and employment - revisited

Michael Moore

No 198316, Working Papers from School of Economics, University College Dublin

Abstract: The Barro-Grossman/Malinvaud model is extended to include two factors of production: skilled labour with a flexible price and unskilled labour with an exogenously determined money wage. A number of simple diagrams are constructed to examine the possiblity that factor substitution could enable wage cuts to restore full employment. However easily interpretable conditions are derived to illustrate the circumstances under which employment of unskilled labour responds perversely to changes in money wages.

Keywords: Factors of production; Unemployment--Effect of wages on (search for similar items in EconPapers)
Date: 1983-11
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http://hdl.handle.net/10197/1405 First version, 1983 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:ucn:wpaper:198316

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