Understanding the Great Changes: A Comment

8 Pages Posted: 23 Jan 2013

See all articles by Axel Leijonhufvud

Axel Leijonhufvud

University of Trento - Department of Economics and Management; University of California, Los Angeles

Date Written: January 23, 2013

Abstract

Phelps provides a theoretical explanation of why rapid productivity growth, good employment performance, and current account deficits tend to go together. There are two strands to it. One is an application of Phelps’s well-known theory of the firm’s offer of employment as an investment decision. In the present context, it explains why an increase in the rate of productivity growth relative to the world interest rate raises the demand price for labor and thus employment.

This paper is a comment on Understanding the Great Changes in the World: Gaining Ground and Losing Ground Since World War II by Edmund S. Phelps which can be found at: http://ssrn.com/abstract=2205843.

Suggested Citation

Leijonhufvud, Axel, Understanding the Great Changes: A Comment (January 23, 2013). Capitalism and Society, Vol. 1, Issue 2, Article 4, 2006, Available at SSRN: https://ssrn.com/abstract=2205846

Axel Leijonhufvud (Contact Author)

University of Trento - Department of Economics and Management ( email )

Via Inama 5
Trento, I-38100
Italy

University of California, Los Angeles

405 Hilgard Avenue
Box 951361
Los Angeles, CA 90095-1361
United States

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