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2 edition of Some macroeconomic implications of alternative wage systems found in the catalog.

Some macroeconomic implications of alternative wage systems

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Published by Dept. of Economics, Massachusetts Institute of Technology in Cambridge, Mass .
Written in English

Edition Notes

Bibliography: p. 24.

StatementMartin L. Weitzman
SeriesWP ; 301, Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 301.
The Physical Object
Pagination24 p. ;
Number of Pages24
ID Numbers
Open LibraryOL24627362M

  Introduction – why system dynamics. System dynamics modelling has grown alongside the development of modern computing, starting with Forrester’s World Dynamics ().The purpose of system dynamics modelling is to form an explicit picture of a system that allows a researcher to understand relationships between the elements in that system, . Macroeconomic strategies and policies have differed significantly among Asian countries, and yet some common issues recur despite their immense diversity in inherited historical initial conditions, differences in political systems, geopolitical situations, location and size, and natural resource endowments. The chapter examines from a comparative perspective issues like . wage. This made it easier to distinguish the effects of minimum wages from those of business cycle and other influences on aggregate low-skill employment. An extensive survey by Neumark and Wascher () concluded that nearly two-thirds of the more than newer minimum wage studies, and 85% of the mostFile Size: 86KB.

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Some macroeconomic implications of alternative wage systems by Martin L. Weitzman Download PDF EPUB FB2

SOME MACROECONOMIC IMPLICATIONS OF ALTERNATIVE COMPENSATION SYSTEMS* Martin L. Weitzman A basic theme of this paper is the idea that some structural reform of employee compensation arrangements is necessary to make reasonable price stability compatible with reasonably full employment.

In this view even the best designed. Nominal wage growth in most advanced economies remains markedly lower than it was before the Great Recession of – This chapter finds that Author: Charles Dennery. The Japanese experience is then examined with an eye to evaluating the possible macroeconomic impact of the bonus system and implications for profit or revenue sharing.

Figures - uploaded by Author: Martin L. Weitzman. implications of alternative expectations processes and intervention strategies (Jonson et al., ). Our paper can be seen as a mOdest extension of research towards a comparable macroeconomic evaluation of alternative models of the determination of flexible exchange rates.

The structure of the paper is as follows: Section 2 contains the. Macroeconomics is a branch of the economics field that studies how the aggregate economy behaves. In macroeconomics, a variety of economy-wide phenomena is thoroughly examined such as, inflation. Arguably, the macroeconomic implications of the proposed policy measure are large, but they stem from a substantial increase in the wage floor: prior to the reform, the share of workers that earn a wage equal or lower than is % in the data and % in the calibrated by: 2.

Downloadable. This paper explores the macroeconomic and welfare implications of the sharp rise in U.S. wage inequality (). In the data, cross-sectional earnings variation increased substantially more than wage variation, due to a sharp rise in the wage-hour correlation.

At the same time, inequality in hours worked, consumption and wealth (excluding the top 1%). We now turn to discussing the macroeconomic implications of the rise in market power in the past decades.

V.A. The Secular Decline in the Labor Share. In the national accounts, the labor share of income measures the expenditure on labor (the wage bill) divided by the total income generated (value added).

Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system and competitive markets.

In a capitalist market economy, decision-making and investments are determined by every owner. Since the mids, there has been considerable research on the macroeconomic consequences of wage indexation.

Nonetheless, until recently, this research had not explicitly explored the implications of contracts that index wages to lagged inflation, the usual type of wage indexation observed in practice. Drawing mainly on recent research by the Cited by: 9. The book highlights both the potential strengths as well as the limitations of alternative models.

However, some key unifying principles in the models are adopted. The most important of these principles is the assumption that economic agents base their decisions on intertemporal optimization of some well-defined objective function, under.

Some of that happens in the debates on minimum wage increases. However, much of apparent disagreement arises from the choice of whether to view the issue through a micro lens or a macro lens.

To read more about the economic analysis of. First we need to be clear on what is bad about a minimum wage. One way to see this more clearly is to define an alternative set of rules that have the exact same economic effects, identical to the cent, but where it is much easier and clearer to.

"The Macroeconomic Implications of Rising Wage Inequality in the United States," NBER Working PapersNational Bureau of Economic Research, Inc. Jonathan Heathcote, "The Macroeconomic Implications of Rising Wage Inequality in the United States," Working Papers gueconwpa~, Georgetown University, Department of Economics.

Unfortunately, this book can't be printed from the OpenBook. If you need to print pages from this book, we recommend downloading it as a PDF. Visit to get more information about this book, to buy it in print, or to download it as a free PDF.

The most important economic problem faced by these socialist countries was slowdown in economic growth in these countries. In Soviet Russia the growth rate which in the post-war period averaged about 7 per cent in s and about 5 per cent in s slipped into 3 per cent range during the s and was nearly zero in the s.

The biggest challenge of the calibration is to assign a reasonable value to λ—the wedge between the unskilled competitive wage and the minimum.

6 Ideally, one would like to have a counterfactual of the federal minimum wage. In other words, it would be desirable to know the competitive unskilled wage w t u, C ly the only tractable way how to assess its size is Cited by: 2.

World Bank staff is presently developing alternative quantitative frameworks that could be used to evaluate some of the macroeconomic aspects of poverty reduction strategies.

1 It is expected that other possible quantitative frameworks will be developed. WORKING PAPER SERIES NO / APRIL MACROECONOMIC IMPLICATIONS OF DOWNWARD WAGE RIGIDITIES 1 by Mirko Abbritti 2 and Stephan Fahr 3 1 We thank Jim Costain, Frank Smets, Grégory de Walque and the members of the Eurosystem Wage Dynamics Network for intense discussions.

Evaluate the possible microeconomic and macroeconomic effects on the UK economy of an increase in the minimum wage. Inthe (former) Chancellor of the Exchequer, George Osborne, declared that “Britain deserves a pay rise” as he unveiled a new compulsory Living Wage, set well above the National Minimum Wage.

implications of this literature for macroeconomic adjustment in the developing countries is highlighted. The structure of this paper is the following: in section II we briefly describe the general tenets of efficiency wage theories.

In Section III we analyze some of the policy implications. Leading scholars analyze a range of specific departures from general equilibrium theory which have significant implications for the macroeconomic analysis of both developed and developing economies.

Jacques Dr?ze considers uncertainty and incomplete markets and Nobel Laureate Robert Solow relates growth theory to the macroeconomic framework. by David Ingram, Demand Media Families experience microeconomic effects from the implementation of a minimum wage.

family image by Mat Hayward from A minimum wage is a prescribed wage level that must be met or exceeded by employers in all employment contracts, as set forth in the Fair Labor Standards Act. The minimum. Macroeconomic theory has its origins in the study of business cycles and monetary theory.

In general, early theorists believed monetary factors could not affect real factors such as real output. John Maynard Keynes attacked some of these "classical" theories and produced a general theory that described the whole economy in terms of aggregates rather than individual.

WAGE INDEXATION: A MACROECONOMIC APPROACH Jo Anna GRAY* University of Rochester, NYU.S.A. This essay examines the role of wage indexation in dampening macroeconomic fluctuations in a simple neoclassical model modified to incorporate short-term wage rigidities and uncer- tainty.

both nominal and real downward wage rigidities of di⁄erent extent across di⁄erent countries even at the more aggregate level. In this paper we analyze, in a simple but rigorous framework, the macroeconomic implications of downward wage rigidities for labor market dynamics, in⁄ation and monetary policy.

Fahr. Microeconomics (from Greek prefix mikro-meaning "small" + economics) is a branch of economics that studies the behaviour of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms.

One goal of microeconomics is to analyze the market mechanisms that establish relative prices among. From a policy perspective, many of the institutional features of the U.S.

labor market — e.g., the laws and regulations that govern employment, hours, wages, fringe benefits, occupational health and safety — evolved in an earlier era.

Given the above trends and implications, some policies may need to be by: 8. overall wage inflation outcome may be miti-gated.1 The Productivity Impact: To the extent that minimum wage increases induce produc-tivity improvements, their effect on overall price inflation may be mitigated. Needless to say, some of these productivity increases may contribute to future wage gains.

Minimum wage changes give rise to poten. Description. Were you looking for the book with access to MyEconLab. This product is the book alone and does NOT come with access to MyEconLab.

Buy Essentials of Economics, 7th edition with MyEconLab access card (ISBN ) if you need access to MyEconLab as well, and save money on this resource. Following a story that runs from the pre-Great Depression era up until the Financial Crisis of –11, this book reveals an intimate connection between new macroeconomic ideas and policies and the events in the real economy that inspired by: 3.

Wage--Price Spiral: The Macroeconomic View Wage and Price Inflation in the United States, Selected Periods, discuss some alternative views of the economy and of. But governments can influence those exchange rates in various ways.

The extent and nature of government involvement in currency markets define alternative systems of exchange rates. In this section we will examine some common systems and explore some of their macroeconomic implications. There are three broad categories of exchange rate systems.

On the cluster of Sustained and inclusive economic growth, macroeconomic policy questions (including international trade, international financial system and external debt sustainability), infrastructure development and industrialization, several speakers highlighted that Economic growth and economic development are not synonymous, and inequality can be a barrier for.

In an influential recent book Mokyr 1 set out the case for what he termed "Cardwell's Law," based on an interpretation of Cardwell. 2 This Law proposes that highly technologically creative societies only remain so for relatively short historical periods.

At some stage the momentum that gathers behind technological advance becomes exhausted. In Mokyr's judgment, the Law has the. The Major Macroeconomic Issues are: Economic growth and standard of living A growing economy means that there will be more goods and services for people to standard of living is the.

This wage adjustment happened within industries and provinces given the regional nature of collective bargaining in Spain. Some 2 years after this event, workers in firms covered by the earlier contracts had a 1 percentage point greater probability of being unemployed than their counterparts covered by the later by: 8.

2) It is difficult to empirically test alternative macroeconomic models against one another because A) macroeconomic models do not predict the same outcomes from policies.

B) macroeconomic models differ in ways that are hard to standardize for. C) macroeconomic models cannot be expressed in mathematical terms. The Impact of Minimum Wage on Small Businesses, Workers, and Employment in the United States Dr.

Navid Ghani Five Towns College Professor of Sociology and History N Service Rd, Dix Hills, NY United States Abstract Minimum wage issues are one of the most controversial and political topics in American politics today.

It oftenFile Size: 51KB. 11 Improvements in Macroeconomic Stability: The Role ofWages and Prices John B. Taylor Macroeconomic fluctuations have been less severe in the past thirty years than in the period before World War II. Although the recessions in the s and s have been large and have been associated with.

Historical Background. John Maynard Keynes published a book in called The General Theory of Employment, Interest, and Money, laying the groundwork for his legacy of the Keynesian Theory of was an interesting time for economic speculation considering the dramatic adverse effect of the Great Depression.Markets are based on voluntary trades.

In Figure "Labor Market with a Minimum Wage", we see that sellers (the workers who supply labor) would like to s hours of labor to the market at the set minimum wage—that is, more people would like to have a hour-a-week job when the wage increases from $4 to $ firms wish to purchase o hours of .nominal wage rigidity.4 This literature has produced a disparate set of results: Some studies find almost no evidence of downward nominal wage rigidity (McLaughlin, ; Smith, ), while others find that wages are almost completely rigid (Altonji and Devereux, ), and some finding intermediate degrees of wage rigidity (Beissinger.