We reinterpret unit labor costs (ULC) as the product of the labor share in value added, times a price adjustment factor. This allows us to discuss the functional distribution of income. We use data from India’s organized manufacturing sector and show that while India’s ULC displays a clear...

This note shows that unit labor costs, the most widely used measure of competitiveness, are equivalent to the labor share in output multiplied by a price-adjustment factor. This has three main implications. First, unit labor costs are not just a technical concept. They embody the social...

With a decrease in formal trade barriers, trade facilitation has come into prominence as a policy tool for promoting trade. In this paper, we use a gravity model to examine the relationship between bilateral trade flows and trade facilitation. We also estimate the gains in trade derived from...

Current discussions about the need to reduce unit labor costs (especially through a significant reduction in nominal wages) in some countries of the eurozone (in particular, Greece, Ireland, Italy, Portugal, and Spain) to exit the crisis may not be a panacea. First, historically, there is no...

Comprising specially commissioned essays, the Handbook provides a comprehensive overview of alternative theories of economic growth. It surveys major sub-fields (including classical, Kaleckian, evolutionary, and Kaldorian growth theories) and highlights cutting-edge issues such as the...

This note shows that unit labor costs, the most widely used measure of competitiveness, are equivalent to the labor share in output multiplied by a price-adjustment factor. This has three main implications. First, unit labor costs are not just a technical concept. They embody the social...

An extensive literature argues that India’s manufacturing sector has underperformed, and that the country has failed to industrialize; in particular, it has failed to take advantage of its labor–abundant comparative advantage. India’s manufacturing sector is smaller as a share of GDP than...

Becoming a rich country requires being able to produce and export commodities that embody certain characteristics. We classify 779 commodities (exported) according to two dimensions: (1) sophistication (measured by the income content of the products exported) and (2) connectivity to other...

This authoritative and stimulating book represents a fundamental critique of the aggregate production function, a concept widely used in macroeconomics.

Unit labor costs in some of the eurozone countries, calculated using aggregate data, increased significantly during the years before the crisis. In this paper, we show that: (i) the construction of unit labor costs using aggregate data, the standard practice, leads to serious problems of...