An Opportunity for the Working Class with Increased Markups
22 Pages Posted: 8 Aug 2018
Date Written: July 21, 2018
This article presents an analysis based on a comparison of stationary states. With technology and relative markups among industries taken as exogenous, the long-period trade-off between wages and rates of profits is determined. A long-period change in relative markups among industries can create a switch point exhibiting capital-reversing. Around such a switch point, a higher wage is associated with firms wanting to employ more labor for a given net output – a favorable occurrence for organized labor.
Keywords: Markup Pricing, Capital-Reversing, Cambridge Capital Controversy
JEL Classification: B51, D33, D43, J21, L13
Suggested Citation: Suggested Citation