real and money wages output and inflation in the semi industrialized world recent structuralist ideas about real and money wage changes are reviewed addressing six questions 1 in an economy closed to trade do real wage increases cause output to rise or fall 2 if output is at an upper bound what are the roles of real wage and wealth movements in macro adjustment 3 taking effective demand into account do money wage cuts stimulate employment 4 in an open economy does money wage reduction or devaluation make output rise 5 at an output bound what are the respective roles of wage reduction and monetary restraint in slowing inflation 6 if inflation is driven by cost with output below capacity how do wage dynamics affect stabilization programmes based on de indexation and price freezes institutional factors suggest that wage cutting may be a counterproductive answer to all these policy questions in semi industrialized economies

a common ground for resource and welfare egalitarianism resource egalitarianism and welfare egalitarianism are two focal conceptions of distributive justice we show in this paper that they share a solid common ground to do so we analyze a simple model of resource allocation in which agents abilities to transform the resource into an interpersonally comparable outcome and starting points may differ both conceptions of egalitarianism are naturally modeled in this context as two allocation rules the two rules are jointly characterized by the combination of three appealing axioms no domination solidarity and composition

how are product demand changes transmitted to the labour market in the traditional keynesian and classical models the transmission of product demand changes to the labor market generally involves wage price sluggishness or countercyclical real wage movements in practice however real wages are often acyclical or procyclical and wages and prices are flexible over periods of several years this paper examines the main channels whereby product demand can affect employment under these conditions the analysis suggests that the effectiveness of demand management policies under wage price flexibility depends significantly on the availability of a limited number of supply side transmission channels copyright 1994 by royal economic society

fair allocation of disputed properties we model problems of allocating disputed properties as generalized exchange economies in which agents have preferences and claims over multiple goods and the social endowment of each good may not be sufficient to satisfy all individual claims in this context we investigate procedural and end state principles of fairness their implications and relations to do so we explore procedural allocation rules represented by a composition of a rights assignment mechanism to assign each profile of claims individual property rights over the endowment and walrasian or other individually rational exchange rule using variants of fairness based on no envy as end state principles we provide axiomatic characterizations of the three focal egalitarian mechanisms known in the literature on rationing problems as constrained equal awards constrained equal losses and proportional mechanisms our results are connected to focal contributions in political philosophy and also provide rationale for market based environ mental policy instruments such as cap and trade schemes and personal carbon trading and moral foundation for the three proposals to allocate ghg emission rights known as the equal per capita sharing the polluter pays principle and the equal burden sharing the victims pay principle

the nairu and wages in local labor markets unemployment in the united states has been below its presumed nairu nonaccelerating inflation rate of unemployment of 6 percent for more than four years the doctrine or dogma of the nairu led to the expectation that an unemployment rate below the nairu would make accelerating inflation inevitable but by all measures inflation has if anything declined and shows no signs of increasing the nairu doctrine has had a major role in macroeconomic theory and monetary policy for several decades for example the seven hikes in interest rates by the fed in 1994 1995 seem to have been motivated not by concerns about existing inflation cpi u inflation was steady and below 3 percent but by fears that an unemployment rate falling toward the 6 percent level and then below 6 percent in september 1994 would foster future inflation theoretical and statistical criticisms of the nairu have been growing see e g robert solow 1986 james tobin 1993 eisner 1994 rod cross 1995 essays by cross frank hahn and tobin ray fair 1996 olivier blanchard and lawrence katz 1997

public ownership of the external world and private ownership of self liberal political philosophy represented classically by john locke and today by libertarians defends great inequality of economic outcome on the basis that people own themselves and are entitled to establish private property in the external world by virtue of that self ownership contemporary nonlibertarian political philosophers such as john rawls and ronald dworkin achieve their relatively egalitarian conclusion by effectively denying self ownership as a premise an alternative challenge to liberalism which does not take the radical starting point of denying self ownership is to declare that while certain rights to benefit by virtue of superior skill should be protected a degree of self ownership productive assets in the external world be viewed as publicly owned and not privately appropriable what allocation mechanisms on a space of possible economies satisfy axioms that are necessary to guarantee both private ownership of self and public or joint ownership of the external world we propose a

bibliography of robert m solow s publications 1950 1987 1952 6 an econometric model of interindustry flows with k j arrow and r shephard abstract econometrica july 1952 7 on the structure of linear models econometrica january 1952 8 review of w e deming some theory of sampling review of econometrics and statistics may 1952 9 review of r dorfman application of linear programming to the theory of the firm journal of american statistical association june 1952 10 review of t c koopmans ed activity analysis of production and allocation journal of american statistical association june 1952 11 review of r roy ed cahiers dii seminaire deconometrie no 1 journal of american statisticalassociation december 1952

real wages and unemployment in australia this paper estimates a three equation model of the australian labor market for employment real wages and the participation rate it uses the model to study the role of incomes policies in containing real wage growth and the reasons behind the changes in unemployment since 1970 it finds that incomes policies have not been important in controlling real wages the rise in unemployment in the 1970s was due to the rise in tax rates and unemployment benefits and the changes in unemployment in the 1980s were connected with changes in investment and aggregate demand copyright 1991 by the london school of economics and political science

precedence privilege preferences plus pareto principle some examples on egalitarian ethics and economic efficiency it is demonstrated how economic theory of justice as fairness pareto improvements on situations involving equity can be used to analyze the ethics contents of distributions of rights and privileges the analysis makes use of the concept of a veil of ignorance to define a status quo a property right to an ability or a privilege is interpreted as a transparency in the veil in respect to this ability or privilege three different examples are investigated focusing on rights as collective goods non transferable abilities and privileges as inherent rights

altruistic voting and campaign contributions abstract an altruistic citizen votes yes in a referendum if the perceived benifit of the project exceeds its perceived cost the altruist gets information about benifits and costs from contributions to the pro and con campaigns in the nash equilibrium of a campaign contribution game with two beneficiaries altruists vote on the side with the largest contribution and altruistic voting guarantees efficient choices if there are many agents however altruistic voters do not always make efficient choices a disclosure law that provides information about the number of beneficiaries increases the efficiency of the referendum process

searching for a will o the wisp an empirical study of the nairu in canada abstract this paper demonstrates the uncertainty surrounding estimates of the non accelerating inflation rate of unemployment nairu a reduced form phillips curve is used to develop a generic model of the nairu which nests competing hypotheses about the specific form of the inflation unemployment relationship empirical results for the canadian economy show that the range of prime age male nairu s generated by statistically satisfactory and economically reasonable estimating equations covers almost the entire range of canadian post war prime age male unemployment experience estimates of the nairu depend heavily on the form of the estimating equation the operational definition of key variables and the data sample period

theory ahead of language in the economics of unemployment this paper discusses from the perspective of modern theories of unemployment several unemployment concepts that have been used over the years it argues that many of these concepts are of limited value and are dominated by a few simple concepts that are basic in the analysis of stochastic general equilibrium models

unemployment getting the questions right in my opinion the form and conception of this conference exemplifies the right instinct for modern macroeconomics there is a fact a big unmistakable unsubtle fact essentially everywhere in the modern industrial capitalist world unemployment rates are much higher than they used to be two or three decades ago why is that if macroeconomics is good for anything it ought to be able to understand and explain that fact we should be able to produce a fairly convincing analytical account of the occurrence and persistence of unusually high unemployment rates you might think that to be a mere commonplace to what other sort of end would anyone organize a conference my experience however is that most high powered academic conferences are stimulated by purely technical developments or less often by ideological or political promotion rather than by the need to deal with an outstanding fact i do not blame anyone for this state of affairs we may not be blessed with many significant observations too big to be quibbled over and technical innovations do need to be thrashed out by experts anyway it is good to be faced by a brute fact that needs explanation it is what macroeconomics ought to be about i compliment the organizers also on a second aspect of the agenda the country by country organization of the papers we can all hope to learn something from cross country comparisons one of the few good ways we have to test analytical ideas is to see whether they can make sense of international differences in outcomes by appealing to international differences in institutional structure and historical environment the right place to start is within each country separately studied by someone who knows the peculiarities of its history and its data you might think that this too ought to be obvious but in fact the usual approach is just the opposite more often than not we fail to take institutional differences seriously one model is supposed to apply everywhere and always each country is just a point on a cross section regression or one among several essentially identical regressions leaving only grumblers to worry about what is exogenous and what is endogenous and whether simple parametrizations do justice to real differences in the way the economic mechanism functions in one place or another i have no way of knowing whether this organized effort will get anywhere in explaining high unemployment but it seems to be set up to give itself the best chance for better or worse probably for the better theoretical and empirical work are closely intertwined in macroeconomics scratch a macro theorist and you find a casual econometrician scratch a macro econometrician and you find a casual theorist usually you do not have to scratch very hard thus the discussion of the issues central to the conference has already hardened into certain characteristic forms there are questions already lying on the table that the individual country papers will be trying to answer i suspect that some

a note on egalitarian and efficient allocations with externalities in consumption abstract a pure distribution problem when individual utilities depend on relative consumption has been treated by villar 1988 in an earlier issue of this journal one of his main results is that for any bundle of goods to be divided there exists a pareto optimal egalitarian allocation in this note we show that there are such distribution problems for which only weak pareto optimal and egalitarian allocations can be ensured

characterizations of bargaining solutions in production economies with unequal skills in production economies with unequal skills this paper characterizes bargaining solutions by using axioms on allocation rules rather than axioms on classical bargaining solutions we introduce a new axiom consistency w r t technological innovations so that the non welfaristic characterizations of bargaining solutions in the production economies are provided by the characterizations we can classify the three bargaining solutions the nash the kalai smorodinsky and the egalitarian solutions from the viewpoint of responsibility and compensation discussed by dworkin

equality of resources implies equality of welfare if one is an egalitarian should one try to equalize resources available to agents or to equalize their welfares with a suitably general conception of what resources are these two conceptions cannot be distinguished an allocation mechanism is defined on a space of economies and is required to satisfy various axioms that are necessary conditions for equalizing resources among a population the unique mechanism satisfying these axioms on a large domain of economies is the one that allocates commodities so as to equalize utilities of the agents methodologically the theorem is a generalization of bargaining theory because the mechanisms are defined on commodity space

class and exploitation in general convex cone economies abstract in this paper we examine what appropriate formulations for labor exploitation are in order to explain the emergence of class and exploitation status in capitalist economies given the well known controversy pertaining to plausible formulations for labor exploitation in joint production economies we propose an axiom axiom for labor exploitation le which every appropriate formulation of labor exploitation should satisfy using this axiom the necessary and sufficient condition for plausible formulations of labor exploitation is characterized to verify class exploitation correspondence principle cecp roemer 1982 according to this cecp no longer holds in general convex cone economies if the well known formulations of labor exploitation such as morishima 1974 and roemer 1982 chapter 5 are applied therefore we propose two new definitions of labor exploitation each of which verifies cecp

wage rigidity micro and macro evidence on labor market adjustment in the modern sector aggregate data on wages and employment may provide misleading indicators of labor market conditions they may suggest inappropriate wage policies in the face of rising unemployment experienced in many developing countries during the 1980s such increases in unemployment are often attributed to wage rigidities a cursory review of aggregate data for the modern sector in cote d ivoire would support this view suggesting that employment declined during the 1979 84 recession due to an increase in real wages examination of disaggregated data from two labor force censuses of the modern sector however shows that real wages declined for specified classes of labor the work force was characterized by greater education training and experience workers with a given level of attributes received a lower real wage by the end of the recession than before it despite this drop in real wages employment in the modern sector declined

no envy and consistency in economies with indivisible goods we consider the problem of fair allocation in economies with indivisible goods our main objective is to identify appealing subsolutions of the no envy solution we formulate desirable properties of solutions and look for solutions satisfying them given an allocation chosen by a solution for some economy and given a subgroup of the agents consider the problem of fairly distributing among its members the resources that this group has collectively received the solution is consistent if it recommends that the same bundle be attributed to each of these agents as initially we show that there is no proper subsolution of the no envy solution that satisfies consistency however many subsolutions satisfy bilateral consistency or the converse of consistency but again there is no proper subsolution satisfying these two properties together

axiomatic bargaining theory on economic environments abstract axiomatic bargaining theory is reexamined by focusing upon the economic exhange environment instead of the traditional utility possibility set it is argued that the axioms of the traditional theory impose stronger restrictions than can be supported by their motivating economic intuitions weaker alternative axioms making explicit use of economic information are used to characterize the standard bargaining solutions a key idea is to impose consistency of the solution with respect to changes in the dimension of the commodity space even these weaker economic axioms however may be unrealistic restrictions to impose on the bargaining solution in the context of many economic bargaining problems

the assessment policy options for the uk previous issues of this review have generally considered particular problems or particular areas of policy the concern of this assessment is rather different to consider the broad range of policy options available to the united kingdom focussing on the main areas of disagreement where economic analysis should be helpful it draws where appropriate not only on the articles on microeconomic and macroeconomic policy included below but also on previous themes covered by the oxford review of economic policy the aim is to delineate the key questions which are or which should be on the policy agenda there is no doubt that the terms of the policy debate have shifted markedly in recent years some disagreements such as those between monetarists and keynesians seem much less important whilst others such as those about the nature and role of the market have sprung to prominance