Efficiency-wage Hypothesis and the Operational Production Pattern
An economy’s production set is the collection of all net output vectors that the economy is capable of producing with a given technology and fixed quantities of primary factors of production. The boundary of this set is called the production possibility frontier or PPF. We show that, if the efficien...
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Veröffentlicht in: | MAGKS - Joint Discussion Paper Series in Economics (Band 46-2011) |
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Autoren: | , |
Format: | Arbeit |
Sprache: | Englisch |
Veröffentlicht: |
Philipps-Universität Marburg
2011
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Schlagworte: | |
Online-Zugang: | PDF-Volltext |
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Zusammenfassung: | An economy’s production set is the collection of all net output vectors that the economy is capable of producing with a given technology and fixed quantities of primary factors of production. The boundary of this set is called the production possibility frontier or PPF. We show that, if the efficiency-wage hypothesis holds, a country’s PPF, though conceptually valid, is an operationally irrelevant concept, because the economy never operates on the PPF, which is a view that ought to be appreciated in light of persistent unemployment in the new structure of economies of the post-21st-Century-crisis world. |
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Umfang: | 15 Seiten |
ISSN: | 1867-3678 |
DOI: | 10.17192/es2024.0111 |