Long Run Demand for Labour in the Consumer Good Industry
7 Pages Posted: 8 May 2006
We consider, for alternative models of production, the comparative statics of constant-returns economies in long run competitive equilibrium, for which reswitching, capital-reversing and consumption-reversal are all completely absent. Notwithstanding the 'well-behaved' nature of these economies, the use of labour per unit of output in the consumer good industry is always positively related to the real wage rate.
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