Efficiency wage effects of profit sharing are combined with option values related to stochastic future profit variations. These option effects occur if the workers' profit share is fixed by long-term contracts. The Pareto-improving optimal level of the sharing ratio is calculated for two...

The interest rate is generally considered as an important driver of macroeconomic investment characterised by a particular form of path dependency, "hysteresis". At the same time, the interest rate channel is a central ingredient of monetary policy transmission. In this context, we shed light on...

Hysteresis in economics is up to now usually based on a representation of a system with only a single input variable, which has a persistent effect on an economic outcome (i.e. the output variable). However, in general there is more than one factor influencing economic decision problems, why the...

Consequences of path-dependent supply side on the market equilibrium are illustrated. Supply is only a subsystem of the entire market with its forcing variable (price) being endogenous from the perspective of the entire market. This results in feedbacks on the equilibrium of price and quantity...

A model with two different production sectors and endogenous growth based on the accumulation of sector-specific human capital due to learning-by-doing is presented. Accumulation of experience is measured by means of sectoral production output aggregated over time. Growth is controlled by a...

A one-sector model of endogenous growth based on the accumulation of real capital by saving/investing and accumulation of human capital via learning-by-doing is presented. Experience is measured by means of production output aggregated over time. Explicitly separating learning and real capital...

Sunk firing costs shelter employment and this effect is typically amplified by uncertainty due to an option value of waiting. Thus, if sunk firing costs are high, e.g. due to a employment protection legislation, and if recession related losses are with a high probability expected to be only...

A non-linear model is applied where suddenly strong spurts of exports occur when changes of the exchange rate go beyond a zone of inaction. We call the latter a play area - analogous to mechanical play and implement an algorithm describing path-dependent playhysteresis into a regression...