Falling Labor Share and Rising Unemployment: Long-Run Consequences of Institutional Shocks?
The literature on unemployment has mostly focused on labor market issues while the impact of capital formation is largely neglected. Job creation is often thought to be a matter of encouraging more employment on a given capital stock. In contrast, this paper explicitly deals with the long-run consequences of institutional shocks on capital formation and employment. It is shown that the usual tradeoff between employment and wages disappears in the long run. In line with an appropriation model, the estimated values for the long-run elasticities of substitution between capital and labor for Germany and France are substantially greater than one. Copyright Verein für Socialpolitik and Blackwell Publishers Ltd 2002.
Year of publication: |
2002
|
---|---|
Authors: | Berthold, Norbert ; Fehn, Rainer ; Thode, Eric |
Published in: |
German Economic Review. - Verein für Socialpolitik - VfS. - Vol. 3.2002, 4, p. 431-459
|
Publisher: |
Verein für Socialpolitik - VfS |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Real Wage Rigidities, Fiscal Policy, and the Stability of EMU in the Transition Phase
Thode, Eric, (1999)
-
Falling labor share and rising unemployment: Long-run consequences of institutional shocks?
Berthold, Norbert, (1999)
-
Rigide Arbeitsmärkte und ungleiche Einkommensverteilung: Ein unlösbares Dilemma?
Berthold, Norbert, (1999)
- More ...