capital utilization economies of scale and technical change in the growth of total factor productivity an explanation of south korean manufacturing growth abstract this paper presents a method of interpreting the growth of total factor productivity directly linking the productivity growth to key parameters of a specific cost function it shows that the productivity index can be decomposed into effects due to a technical change b non constant returns to scale and c change in capital utilization the decomposition framework was applied to data on south korean manufacturing during the 1961 1980 period in south korean manufacturing the total factor productivity was found to have grown at 3 per annum scale economies contributed about 38 of the growth of tfp the technical change 45 and the change in the capital utilization rate 17 the results of this study support of the view that for growing less developed economies the growth in capital utilization rate is a source of growth in total productivity that is too significant to be ignored

adjustment costs and indeterminacy in perfect foresight models abstract this paper suggests a method for resolving indeterminacy of equilibrium in perfect foresight models and applies it to several existing models quadratic adjustment costs are introduced into models with multiple equilibria and the limiting behavior of the resulting solutions is studied as the adjustment costs go to zero the method is shown to be useful in selecting among feasible equilibria in examples in which there is local indeterminacy

cyclical and causal relations between real wages and employment in the eu this paper analyses and compares the joint behaviour of real wages and employment over the business cycle in the european union eu economies using both annual and quarterly data since 1960 further investigation of the cointegrating properties and the existence of causal effects in the real wage employment relation is undertaken by employing appropriate var models the evidence suggests weak procyclical or acyclic behaviour of real wages relative to cyclical employment in the quarterly data and stronger procyclicality in the annual data thus confirming the dunlop tarshis result for the majority of the eu economies with a few exceptions no cointegrating relations were detected while the granger causality tests suggest either weak or lack of unidirectional causality finally the sensitivity analysis showed that the filtering method has not much influence on the results but the choice of deflator may overturn them in certain cases

a note on the optimal tariff retaliation and the welfare loss from tariff wars in a framework with intraindustry trade abstract this paper uses krugman s 1980 model of trade with product differentiation and monopolistic competition to examine the effects of a uniform ad valorem tariff the main results are there exists an optimal tariff even for a small economy and the optimal tariff rate is an increasing function of the size of the economy and the degree of production differentiation under reasonable parameter assumptions a tariff war between two countries of equal size in which each country retaliates by imposing its own optimal tariff causes a welfare loss equivalent to a drop in income of about 4 percent

productivity growth in uk manufacturing and production industries 1948 68 this paper estimates residual productivity growth for twenty eight uk manufacturing and production industries for 1948 68 using a production function approach and the importance of distinguishing between a gross output and value added from of production function is stressed the results are compared to those obtained by the cambridge growth project which uses an input output framework the value added production function gives similar results to the cambridge approach and it is shown that this is not altogether surprising the results from a gross output production function are also shown these estimates are generally lower than those obtained using a value added or net output system which is what would be expected

an analysis of bilateral intra industry trade in the food processing sector this paper analyses determinants of intra industry trade in food processing for a 30 country sample over the period 1964 85 previous studies have tested the hypothesis that imperfect competition is a major determinant of intra industry trade iit in the durable goods manufacturing sectors this study is distinguised from the earlier studies of iit by the examination of the processed food sector sic 20 the use of a panel data set for 22 years and 30 countries available at the four digit sic level the use of purchasing power parity measures of gdp and the use of a weighted tobit model with fixed effects to account for the censored cross section time series nature of the date the results indicate that iti in food processing is a positive function of a country s gdp per capita and equality if gdp per capita between countries in addition it is also found that such trade is strongly influenced by distance between trading partners membership in customs unions and free trade blocs and also exchange r

tax competition and tax co ordination under destination and origin principles a synthesis this paper proposes a general framework for analysing commodity tax competition under destination and origin principles based on three possible tax spillovers the consumer price spillover the producer price terms of trade spillover and rent spillovers a model is presented which can be extended to accommodate all three spillovers using this model many of the results in the existing literature can be derived compared and extended

nominal and real wage cyclicality during the interwar period although there have been numerous attempts to study the cyclicality of real wages in the u s no consensus has formed as to the implications of the various findings for business cycle theory this paper will demonstrate that separating the real wage into its nominal and price level components can shed new light on the interwar u s labor market more specifically we will show that an evolution from a relatively laissez faire labor market during the 1920s to a more highly regulated labor market during the 1930s may have resulted in a more countercyclical real wage rate if we could be certain that equilibrium business cycle models provided the correct specification of the labor market then interpretation of real wage cyclicality would be relatively straightforward during periods dominated by labor demand shocks real wages would move procyclically and during periods dominated by labor supply shocks real wages would move countercyclically in a disequilibrium model context however interpretation of real wage cyclicality is much more problematic if nominal wages are sticky then unanticipated price level changes can induce countercyclical real wage movements that mimic the real wage movements generated by shifts in the supply of labor perhaps the most famous and controversial example occurred during the first three years of the great depression when a massive decline in hours worked and production was associated with a sharp increase in the aggregate real wage rate see figure 1 even greater complexity results from governmental attempts to influence the aggregate nominal wage policies that attempt to artificially change the nominal wage rate can result in either procyclical or countercyclical real wages depending on whether the direct impact of changes in the price of labor on the quantity of labor demanded outweighs the impact of wage changes on aggregate demand and output separating the aggregate real wage rate into its nominal and price level components will allow us to discriminate between these two hypotheses if labor markets are correctly characterized by equilibrium models then the price level and real wage are determined independently and separating the real wage into its nominal and price

growth accounting with intermediate inputs and the transmission of technical change abstract the aggregate rate of total factor productivity growth tfpg when there are intermediate inputs can be expressed either as a weighted average or as a weighted sum of the sectoral rates depending on the choice of sectoral rates being weighted the agrument that there is a magnification effect due to the transmission of tfpg through the intersectoral flows among sectors is therefore to be more illusory than real

the definition of stability in models with perfect foresight abstract frequently the stationary states of decentralized models with perfect foresight and more than one asset are saddlepoints in this note we develop a distinction between historical and nonhistorical variables then we use the distinction to define economic concepts of weak and strong local asymptotic stability which apply even for some saddlepoints we conclude with three examples

real wages over the business cycle some further evidence over the past 50 years economists have been puzzled by the movement of real wages over the business cycle neoclassical and early keynesian theories advanced the view that real wages are countercyclical varying inversely with employment and output over the business cycle 12 13 on the other hand early empirical evidence by dunlop 9 and tarshis 25 suggested that in fact real wages move procyclically the macroeconomic disequilibrium analysis of barro and grossman 3 provided a theoretical explanation for the possibility of procyclical real wages despite this theoretical work numerous recent empirical tests of the movement of real wages over the business cycle have reached no definite conclusions one reason these studies have reached no definite conclusion lies in the fact that they have been performed at the aggregate level 2 they have ignored the possibility that the agesex race composition of the labor force may change considerably over the course of the business cycle but the human capital theory of becker 4 and oi 21 and the more recent implicit contract theory of azariadis 1 and baily 2 predicts that employment shares of different demographic groups will vary over the business cycle consider the consequences of changing employment shares suppose for instance that firms tend to lay off lower skill and or less senior workers during cyclical downturns and retain workers who on the average are higher skilled and or more senior than the workers laid off the result will be that the quality of the workers still employed will rise as a consequence the aggregate real wage which is typically constructed by dividing the aggregate straight time payroll by aggregate straight time manhours will tend to rise even when no real wage growth has in fact occurred per unit of quality adjusted labor to reverse the example during cyclical expansions employment increases may come disproportionately from among lesser skilled less senior workers because employment is becoming more skewed towards lower paid workers the aggregate real wage may show a decline even when no workers have actually

tax disturbances and real economic activity in the postwar united states abstract this paper investigates the macroeconomic effects of cyclical fluctuations in marginal tax rates it finds that systematically including tax variables in a standard real business cycle model substantially improves the model s ability to reproduce basic facts about postwar u s business cycle fluctuations in particular modeling fluctuations in personal and corporate income tax rates increases the model s predicted relative variability of hours and decreases its predicted correlation between hours and average productivity fluctuations in tax rates produce large substitution effects that alter the leisure labor supply decision

trade policy with increasing returns and imperfect competition contradictory results from competing assumptions abstract a number of recent papers derive different results about the effects of trade and industrial policy on imperfectly competitive industries this paper sets out a single model within which policy under different market structures can be examined we consider the four types of market structure generated by oligopoly versus free entry and segmented markets versus integrated markets we conclude that the effects of policy are greater when markets are segmented than when they are integrated and that if transport costs are small policy is more potent when the number of firms is fixed than when there is free entry

intra industry trade in agrofood sectors the case of the eec meat market examination of intra industry trade iit and of its determinants has so far been confined to industrial commodity markets taking the case of red meat the possibility of trade overlap in a typical agroffod commodity is observed further based on previous theoretical analyses and empirical indications it tests formally a general and a restricted set of country and industry or demand and supply hypotheses which being particular to the eec meat market may account for cross country variations in iit in 1988 results suggest that taste overlap as approached by countries cultural and economic convergence as well as the imperfectly competitive structure of the market as supported by product differentiation significantly explain iit despite some methodological shortcomings there seems to be ample scope for the application of similar models in other agrofood sectors in what remains a relatively under researched area

the real wage employment relationship an industry analysis abstract estimates of industry differences in the strength and direction of the real wage employment relationship are used to draw implications for the magnitude of aggregation bias and the role of employment contracts

disaggregating the effect of the business cycle on the distribution of income this paper disaggregates total household income into a complete set of components and studies the comparative cyclicality of these com ponent to economic growth comparisons of the relative responsiveness to gnp growth of wages hours of work and total labor market income of heads and wives and transfer income sources of households are made across income race sex and age groups this provides a picture of the channels by which economic growth produces income change significant differences in elasticities are found to exist both between different income components and between different population groups for the same component the narrowing income distribution in times of high growth occurs primarily because of large elasticities on head s labor market income among the poor both wages and hours show evidence of cycli cality the labor market earnings of women both wives and household heads is far less responsive to growth cyclicality in transfer income varies enormously between population groups and by type of transfer

determination of employment with wage and price speculation the purpose of this paper is to investigate whether aggregate fluctuations in employment may be explained within a market clearing framework as intertemporal substitution in labor supply and demand an intertemporal substitution model for the firm is derived this model is estimated with a lucas rapping type supply equation empirical results with finnish data lend support to the intertemporal substitution model particularly concerning the demand function specification on the other hand the results for the supply equation are somewhat mixed being rather sensitive to the dynamic specification

the sharing of total factor productivity gains in canadian manufacturing a price accounting approach 1965 1980 this papers user a price accounting approach to measure total factor productivity growth in canadian manufacturing at the two digit level over the period 1965 80 its purpose is to describe how given productivity improvements have been apportioned among labour capital materials and government through an increase in the price of these factors or through an increase in taxes levied on factor inputs and consumers through a decrease in the industry selling prices

energy price shocks and productivity growth in us and uk manufacturing because sustained changes in the trend of productivity growth are so very important for people s long run economic welfare the dramatic productivity growth slowdown of the 1970 s and early 1980 s has been the focus of much analysis and discussion for some observers it was much more than coincidence that the oil price shocks of 1973 74 accompanied the sharp slowdowns in traditionally measured productivity growth not only in the united states and the united kingdom but throughout the industrialised world however establishing quantifying and explaining sig nificant linkages between energy price shocks and productivity growth has proved to be most difficult traditional and time honoured relationships involving productivity growth have all seemed incapable of explaining this slowdown for example edward denison author of several widely cited productivity studies has concluded that energy had essentially no role in explaining the productivity growth slowdown and that moreover what happened is to be blunt a mystery 1979 p 4

sticky wage or sticky price analysis of the cyclical behavior of the real wage the study of business cycles has been at the heart of macroeconomic theory for decades theoretical efforts have focused on providing an adequate explanation for sources of economic fluctuations new keynesian explanations have emphasized rigidity that interferes with market forces increasing the effect of demand shocks on the output produced the form of rigidity is in sharp contrast between sticky wage and sticky price models the former imposes rigidity on the shortrun adjustment of wages to demand shocks 20 47 the latter in contrast imposes rigidity on the short run price adjustment to demand shocks 2 34 40 9 43 4 the theoretical plausibility of competing explanations of business cycles has stimulated interest to establish their empirical validity 32 28 1 8 11 23 21 26 these efforts have focused attention on cyclical fluctuations of the real wage in response to demand shocks the real wage may move procyclically or countercyclically according to the relative adjustment of wages and prices the interest in studying the cyclical behavior of the real wage relates to its implications to the real effects of aggregate demand shocks in the context of sticky wage models nominal wage rigidity reinforces the countercyclical response of the real wage to demand shocks and the real effect of these shocks on output growth sticky price models in contrast advocate that price rigidity increases the procyclical response of the real wage to demand shocks and their real effect on output growth the results of earlier investigations of the cyclical behavior of the real wage appear conflicting and therefore do not lend support to a given explanation 2 the present investigation seeks to contribute to this literature unlike previous empirical research on the subject the objective of this investigation is to study the cyclical behavior of the real wage and the relative flexibility of the nominal wage and the price level that determines this behavior in response to demand shocks using data for the united states in the preand post world war ii sample periods the cyclical

customer markets credit market imperfections and real price rigidity according to standard theory an increase in demand should raise prices of goods given factor prices empirically however prices appear to be unaffected by short run variations in demand this paper suggests an explanation of this observation if customers react slowly to price changes and credit markets are imperfect prices may be unchanged or even fall when demand increases the reason is that when demand is high profits are high and firms can compete more intensely for customers without increasing their borrowing copyright 1991 by the london school of economics and political science

post war productivity patterns in u s agriculture influences of aggregation procedures in a state level analysis annual data for forty eight states are used to account for changes in the composition of input and output aggregates over space and time and thereby to obtain new evidence on changes in inputs outputs and productivity in u s agriculture the measures change significantly when we use state specific rather than national prices and when we allow for changes in the composition of the aggregates especially of labor and capital inputs we compare our estimates and those reported by ball et al american journal of agricultural economics 81 1999 164 79 the national estimates are similar but substantial differences are found in state level productivity growth

wage bargaining in a macroeconomic model with rationing a model of a single commodity closed economy is constructed in which the commodity price is fixed and its market clears by quantity adjustment the distinctive feature is that the real wage and employment are determined by bargaining between unions representing workers and firms there are several possible regimes some with labor hoarding the effects of changes in autonomous spending and the reservation wage on the endogenous variables of the model including employment and the real wage are discussed some interesting possibilities emerge for the cyclical movement of productivity and the real wage

productivity in the united states trends and cycles productivity growth in the us has taken a sharp downturn in recent years two experts provide a new body of comparative data on productivity since 1948 by major sector and industry the book analyzes 20 industries to highlight trends and fluctuations in productivity and to provide a better context for the discussion of policy options the authors set forth the causes of productivity advances based on growth accounting for the business economy as a whole they detail interindustry regressions with particular reference to the productivity slowdown since 1966 they look at both the traditional measure of productivity labor output per hour and the more recently developed measure of total factor productivity which takes into account capital as well as labor inputs the quarterly and annual data are used to relate changes to other basic variables such as factor prices unit costs and product prices an appendix presents data for 35 industries 42 references 8 figures 30 tables

dynamic determinacy and the existence of sunspot equilibria this paper relates the existence of stationary sunspot equilibria in the vicinity of a conventional stationary state to the phase diagram surrounding the latter we find that the local condition required for a unique equilibrium path returning to the stationary state following any slight disturbance of initial conditions is also sufficient to exclude stationary sunspot equilibria in the stationary state s immediate vicinity in that sense an eigenvalue condition familiar from dynamic analysis can tell us something about the possibilities of local sunspot activity as well journal of

optimum product variety in urban areas abstract a monopolistically competitive industry in which firms produce differentiated products subject to increasing returns to scale technology is superimposed on a monocentric residential land use model the main result is the demonstration that given an isoelastic demand structure the market equilibrium will correspond to a first best optimum if firms own shares in land rents and population is set optimally this result contrasts with existing literature on monopolistic competition and product diversity in which it is contended that the market equilibrium is a second best optimum if firms do not own shares in land rents a corrective subsidy paid to firms and financed out of a tax on differential land rents will result in replication of the planning solution

testing long run productivity models for the canadian and u s agricultural sectors the primary objective of this paper is to develop the linkages between the gross and net productivity indexes and the implied production structures these linkages are developed as separability restrictions on various subgroups of inputs and time in a general production model the restricted models are arranged in sequences for nested hypotheses testing empirical evidence from the u s and canadian agricultural sectors based on a translog production function support the gross output total factor productivity structure the net output hicks neutrality hypothesis is rejected for both the united states and canada

real wage growth technical change and competition in the labor market the paper measures the rate of growth of average labor cost and the real wage for the twenty u s two digit manufacturing industries 1948 76 it is argued that these rates of growth give interesting information which other studies on the real wage ignore the results suggest that the gains from technical advance are shared equally across all labor markets consistent with the competitive paradigm a simple and appealing rationale for the observation that high growth industries show the slowest relative rate of growth of prices is also given t he general theory keynes 1936 unleashed many controversies one of the earliest and still topical controversy is the cyclical behavior of the real wage essentially the real wage employment debate has focussed on whether or not the demand schedule slopes downwards and there have been many studies on this topic producing a variety of conflicting findings a common feature of the real wage employment studies is to abstract away from the growth in the real wage that is bound to occur in a growing economy these studies are primarily concerned with deviations from trend or innovations in the real wage and the theme of this paper is that to ignore the growth in the real wage is to throw away valuable and interesting information this information on real wage growth tells us a great deal about competition in the labor market this study should be seen as being complementary rather than conflicting with the real wage employment studies the existence of a downward sloping demand curve for labor is after all not sufficient and probably not necessary for the functioning of competitive labor markets over the span of years 1948 76 i find that individual u s manufacturing industries record widely varying rates of productivity growth however these same industries tend to show a common rate of growth of the real wage this feature of productivity growth was emphasized by the late salter 1960 in his pathbreaking analysis of technical change he writes there is no tendency for above average increases in labour productivity to be accompanied by above average increases in earnings

non nested tests of efficient bargain and labour demand models abstract in this paper efficient bargain and labour demand models derived from a variety of product market structures are compared using non nested test procedures data on wage employment outcomes are drawn from actual contract data from the canadian unionised sector results indicate that efficient bargain models are preferred to labour demand models

commercial policy and intra industry trade abstract this paper constructs a model of intra industry trade within a multi product industry whose output range is limited to that obtainable from a particular type of capital intra industry trade is a natural outcome in this structure without requiring increasing returns to scale or imperfectly competitive markets and with its pattern determined along traditional relative factor abundance lines the volume of this trade will vary inversely with the level of trade restrictions as observed empirically other policies are then considered for their influence on the range rather than the level of domestic production since the former is the more likely policy objective under these circumstances

derationalizing tariffs with specialized intermediate inputs and differentiated final goods abstract existing analyses of differentiated products suggest that a small tariff must be welfare improving as a positive terms of trade effect and an increase in the number of domestic varieties outweighs the loss of foreign varieties this result appears to be due to an arbitrary assumption that the intra sectoral elasticity of substitution in consumption exceeds the inter sectoral elasticity this paper demonstrates that complementarity among specialized inputs or differentiated final goods implies that a small tariff can derationalize production sufficiently such that the number of domestic inputs goods falls and welfare is reduced

an estimate of the textile and clothing sector production function for selected countries in the early 1970s abstract this paper describes the results of the estimation of sector wide production functions for textiles and clothing for nine industrialized and five industrializing countries in the early 1970s special attention is paid to relative differences between countries especially with respect to the changing role and productivity of labor although somewhat primitive in nature the results suggest that this is a fruitful way to gain a better understanding of the changing international division of labor at the sector level

optimal tariffs for trade in monopolistically competitive commodities abstract the welfare implications of international trade are examined for an economy which contains a monopolistically competitive industry and imports products directly competitive with this industry necessary and sufficient conditions for such trade to increase welfare are found and optimal import tariffs are derived and analysed

tax changes and phase diagrams for an overlapping generations model the literature evaluating tax changes within an intertemporal general equilibrium framework subdivides into representative agent and overlapping generations formulations papers in the former class have developed techniques analogous to those routine for static analyses i show that the same general approach works for the overlapping generations model the context is the system from auerbach and kotlikoff s dynamic fiscal policy the proposed methodology allows one to examine stability and determinancy issues for the model it deals precisely with small policy changes and it can easily handle bundles of changes i present comparative static results for comparison with existing work

the relative adjustment of wages and prices direct tests within a multiple equation system in order to assess the relative rigidity of the aggregate price level and the nominal wage rate most researchers have focused on the implied behaviour of the real wage rate in response to a purely demand disturbance the present work examines the explicit behaviour of the two variables and is therefore able to analyse the variables short run responses within the context of their defined long run behaviour while the paper reports evidence of long run stability in the real wage rate additional evidence is presented which supports both sticky price and sticky wage models the determining factor is the choice of lag

the possibility of welfare gains with capital inflows in a small tariff ridden economy capital inflows with full repatriation give rise to welfare improvement possibilities in a small tariff distorted economy when imperfect competition and increasing returns are allowed for in one sector of a two sector model this is in contrast to the brecher alejandro proposition that capital inflows with full repatriation are necessarily immiserizing for a small tariff ridden economy we find that welfare gains chances are greater a the higher the expenditure share of the capital intensive differentiated good b the lower the substitutability between brands and c the lower the share of tariff revenue in national income

complementarity and increasing returns in intermediate inputs abstract conventional analysis in the trade industrial organization literature suggests that when a country has some market power over an imported good some small level of protection must be welfare improving this is essentially a terms of trade argument that is reinforced if the imported goods are substitutes for domestic goods produced with increasing returns to scale goods that are initially underproduced in free trade equilibrium this paper notes that this result may not hold when 1 the imports are intermediates used in a domestic increasing returns industry and or 2 the intermediates are complements for domestic inputs produced with increasing returns we then demonstrate such an outcome with respect to mexican protection against imported auto parts using an applied general equilibrium model of the north american auto industry

real wage and real labour cost growth 1948 81 a disaggregated study the paper examines growth rates in labour cost and real wages for up to 38 separate uk industry categories this reveals much interesting information about labour markets which is ignored in most studies of the real wage the latter are mostly concerned with disequilibrium behaviour of the real wage the theoretical section of the paper explores the relationship between the growth rates in productivity real wages labour costs profit rates and value added prices relative to average prices under the assumption that factor markets are competitive the second section computes these respective growth rates and explores how well the competitive hypothesis stands up the results indicate reasonable agreement with the competitive thesis

technological linkages market structure and production policies abstract proponents of industrial policy argue that key industries merit subsidies because they generate beneficial externalities we show that policy must reflect both technological linkages and market power in the target industries the interaction of which may produce an optimal policy including both subsidies and taxes on target industries the optimal policy combination may not be politically or administratively feasible if so we show that it may not be desirable to subsidize output in the externality generating activity on either a fixed or per unit basis thus technological linkages alone do not lead to the presumption that the externality generating activity should be subsidized

the new protectionism revisited this paper reviews the strategic trade literature in oligopolistic industries beginning with the brander spencer 1984 model of duopolistic international rent shifting issues of long run equilibrium entry conditions and empirical estimates of the size of oligopolistic rents in tradable goods industries are reviewed in addition the results of simulation models of strategic trade policy are summarized the final sections of the paper deal with issues of the retaliation by other countries against single country policies and long term policy equilibrium it is emphasized that the prisoners dilemma characterization of these equilibria may be inappropriate and managed trade may be a more plausible outcome in oligopolistic industries than strategic trade policies

the employment real wage relationship an international study the neoclassical and keynesian theories of employment both predict an inverse relationship between employment and real wages in the short run the observed correlation between employment and real wages however has usually failed to conform to this prediction dunlop 1938 and tarshis 1939 reported a positive correlation between real and money wages which given procyclical movement of money wages was interpreted as evidence against the theoretical prediction the statistical significance of these results was however challenged by ruggles 1940 and tobin 1948 more recent studies by kuh 1966 and bodkin 1969 failed to detect a significant relationship between real wages and employment these findings stimulated a series of contributions by solow and stiglitz 1968 barro and grossman 1971 1976 and others developing alternative models not apparently refuted by the evidence barro and grossman recast macro theory under the assumption that markets did not clear modigliani 1977 argued that the observed relationship between employment and real wages could be accounted for in an oligopolistic model of firm behavior thus both the competitive and equilibrium assumptions of the classical model were diagnosed as the sources of its apparent empirical refutation

demand shocks supply shocks and the cyclicality of real wages the behaviour of real wages over the business cycle has received increasiing attention in recent years the cyclicality of real wages constitues an important aspect of recent models of the business cycle however empirical studies undertaken to determine whether real wages are procyclical or countercyclical have reported conflicting findings in thiis paper we use vector autoregressions to analyse the cyclicality of real wages we find that the source of the disturbance plays a decisive role in the cyclical behaviour of real wages in particular we demonstrate that a supply shock generates procyclical real wages whereas a demand shock yields countercyclicality

employment during the thatcher years did they fall or were they pushed the paper examines the argument that real wage push has been responsible for the observed increase in unemployment in the uk over the period 1979 to 1985 it explains why real wage push should have been associated with a decline in real profits and that this decline did not in fact occur the association between real wage push and profit decline is complicated by the presence of intermediate inputs and by compositional effects these are also considered an equation accounting for these complications is derived and estimated the data used are individual company records for around 2 300 of the largest uk public and private corporations with on average about 5 500 employess the hypothesis that real wage push caused recently observed increases in unemployment is rejected by the data

multiple equilibria in the theory of international trade with monopolistically competitive commodities abstract this paper develops a model of trade in monopolistically competitive commodities of the type analysed by krugman and by dixit and norman it is established that small perturbations in the parameters of the model radically change the number and type of equilibria of the model for certain parameter values the model has multiple equilibria some though possibly not all of which support intra industry trade the stability of each equilibrium is examined and it is established that if there are multiple equilibria there are multiple stable equilibria

a cross section analysis of intra industry trade in the u k abstract in this paper the inter industry patterns of intra industry trade in the united kingdom are explored a cross section econometric model is explained and estimated for the year 1977 two samples of 37 and 68 observations are tested using a variety of proxies for features of market structure including market concentration product differentiation and cost conditions the results suggest that a significant proportion of the inter industry variation in intra industry trade can be explained by the model