Structural Economic Dynamics, Real Wicksell Effects, and the Reverse Substitution of Labor
26 Pages Posted: 13 Nov 2018
Date Written: October 21, 2018
This article presents an example in which technical progress results in variations in the labor market. Around a switch point with a positive real Wicksell effect, a higher wage is associated with firms wanting to employer more labor per unit output of net product. Around a switch point with a reverse substitution of labor, firms in a particular industry want to hire more labor per unit output of gross product. Technical progress can bring about and take away circumstances favorable for workers wanting to press claims for higher wages.
Keywords: Cambridge Capital Controversy, Labor Market, Wicksell Effects
JEL Classification: B51, D33, J21
Suggested Citation: Suggested Citation