Always a Winning Strategy? Wage Moderation’s Conditional Impact on Growth Outcomes

2020 ◽  
pp. 291-319
Author(s):  
Alison Johnston
Keyword(s):  
Growth Model ◽  
Growth Models ◽  
Winning Strategy ◽  
Labor Cost ◽  
Wage Bargaining ◽  
Wage Setting ◽  
Growth Outcomes ◽  
Wage Moderation ◽  
Comparative Capitalism ◽  
Export Shares

Wages and wage bargaining institutions are foundational components of comparative capitalism research. Supply-side comparative capitalism research has often assumed that wage moderation—facilitated through highly coordinated wage-setting institutions—produces beneficial growth outcomes. This supposition stems from the logic that restrained unit labor cost growth causes firms to increase employment and output. However, through its demand-side perspective, new growth model literature questions the virtues of wage moderation, because the restraint of wages can be detrimental to growth via its suppression of domestic consumption. This chapter empirically tests under what conditions will wage moderation produce economic growth. Using a first-difference, distributive lag panel analysis of eighteen OECD countries from 1970 to 2015, its findings largely resonate with predictions within the growth model literature. In the presence of wage restraint, countries with larger export shares and highly coordinated wage-setting institutions realize higher growth and lower unemployment than countries with smaller export shares and uncoordinated wage-setting institutions. In contrast, wage inflation produces better growth outcomes for countries with uncoordinated wage-setting, relative to those with highly coordinated wage-setting institutions. These results suggest that wage restraint is not a winning strategy for all growth models. Rather, wage moderation is associated with better growth (and unemployment) outcomes only for countries with export-led growth strategies.

scholarly journals In search of developmental capitalism institutions:

2021 ◽  
Vol 9 (22) ◽  
pp. 45-74
Author(s):  
Moises Balestro ◽  
Antonio Junqueira Botelho
Keyword(s):  
Emerging Markets ◽  
Growth Model ◽  
Global Economy ◽  
Growth Models ◽  
Analytical Framework ◽  
Sustainable Growth ◽  
Middle Income ◽  
Positive Externalities ◽  
Comparative Capitalism ◽  
Path Dependent

How can we explain that some emerging economies grow faster than others? What explains the sustainability of their growth? Not all types of capitalism in emerging markets contribute equally to sustainable growth rates that undergird development. Comparative capitalism research on European economies temporary growth models aims to more properly grasp change in the varieties of capitalism approach. Adoption of the growth models in emerging markets capitalism research requires attention to integration into the global economy and to political coalitions, and the need to deal with the methodological challenges, given high labor market informality and political instability. This article seeks to make sense of changes in the components of successive growth models throughout a path-dependent capitalist variety, expand the growth model analytical framework by testing elements alongside demand (and supply) based on a case study of Brazil, and explore coalitions in economic reform to identify growth model’s social blocs. The article’s results unveil challenges to the employment of existing concepts and analytical framework; the need to build bridges between growth models and the political economy of development; and an exploratory assessment of growth model contributions to Brazil's postwar development. Thereof, in the long term, interest shifts of economic elites between liberal and non-liberal economic regimes suggest a fragility of repeated attempts to form a durable developmental coalition, a process dynamic that frays state-permeated capitalism positive externalities. It concludes that both path dependent developmental institutions, which hinder change, and growth instability limit the possibilities of designing institutional reforms out of the middle-income trap.

The Comparative Political Economy of Growth Models: Explaining the Continuity of FDI-Led Growth in Ireland and Hungary

2021 ◽  
Vol 49 (1) ◽  
pp. 75-106
Author(s):  
Dorothee Bohle ◽  
Aidan Regan
Keyword(s):  
Capital Investment ◽  
Multinational Firms ◽  
Growth Models ◽  
Case Study Research ◽  
Comparative Case Study ◽  
Oriented Growth ◽  
Political Determinants ◽  
Growth Regime ◽  
Business Power ◽  
Comparative Capitalism

This article argues that the quiet politics of informal business-state interaction explains the political determinants of growth regimes. Building on the business power literature within the study of comparative capitalism, it shows that the noisy politics of elections often leads to changes of government but rarely to fundamental changes in the growth regime. Rather, growth models can be traced to the interactions and interests of dominant corporations within a country and its policymaking elites. The argument is developed through a comparative case study research design, using the case of foreign direct investment–led (FDI-led) growth in Ireland and Hungary. FDI-led growth regimes are a universe of cases that rely on state-led industrial and enterprise policies targeting the capital investment of foreign-owned multinational firms. Despite periods of noisy electoral politics challenging basic tenets of the FDI-led growth model in both Hungary and Ireland, the continuity of FDI-oriented growth is traced to the corporate politics of business-state elite deals.

scholarly journals Wage bargaining as an optimal control problem: a dynamic version of the efficient bargaining model

2021 ◽  
Author(s):  
Marco Guerrazzi
Keyword(s):  
Optimal Control ◽  
Continuous Time ◽  
Bargaining Power ◽  
Wage Bargaining ◽  
Bargaining Model ◽  
Speed Of Convergence ◽  
Wage Setting ◽  
Dynamic Version ◽  
Efficient Bargaining ◽  
Over Time

AbstractIn this paper, I develop a dynamic version of the efficient bargaining model grounded on optimal control in which a firm and a union bargain over the wage in a continuous-time environment under the supervision of an infinitely lived mediator. Overturning the findings achieved by means of a companion right-to-manage framework, I demonstrate that when employment is assumed to adjust itself with some attrition in the direction of the contract curve implied by the preferences of the two bargainers, increases in the bargaining power of the firm (union) accelerate (delay) the speed of convergence towards the stationary solution. In addition, confirming the reversal of the results obtained when employment moves over time towards the firm’s labour demand, I show that the dynamic negotiation of wages tends to penalize unionized workers and favour the firm with respect to the bargaining outcomes retrieved with a similar static wage-setting model.

scholarly journals Comparison of growth models to describe growth from birth to 6 years in a Beninese cohort of children with repeated measurements

BMJ Open ◽  
2020 ◽  
Vol 10 (9) ◽  
pp. e035785
Author(s):  
Shukrullah Ahmadi ◽  
Florence Bodeau-Livinec ◽  
Roméo Zoumenou ◽  
André Garcia ◽  
David Courtin ◽  
...  
Keyword(s):  
Growth Model ◽  
Goodness Of Fit ◽  
Growth Models ◽  
Information Criterion ◽  
Height Growth ◽  
Sub Saharan Africa ◽  
Individual Growth ◽  
Secondary Outcome ◽  
Growth Trajectories ◽  
Best Fitting

ObjectiveTo select a growth model that best describes individual growth trajectories of children and to present some growth characteristics of this population.SettingsParticipants were selected from a prospective cohort conducted in three health centres (Allada, Sekou and Attogon) in a semirural region of Benin, sub-Saharan Africa.ParticipantsChildren aged 0 to 6 years were recruited in a cohort study with at least two valid height and weight measurements included (n=961).Primary and secondary outcome measuresThis study compared the goodness-of-fit of three structural growth models (Jenss-Bayley, Reed and a newly adapted version of the Gompertz growth model) on longitudinal weight and height growth data of boys and girls. The goodness-of-fit of the models was assessed using residual distribution over age and compared with the Akaike Information Criterion (AIC) and Bayesian Information Criterion (BIC). The best-fitting model allowed estimating mean weight and height growth trajectories, individual growth and growth velocities. Underweight, stunting and wasting were also estimated at age 6 years.ResultsThe three models were able to fit well both weight and height data. The Jenss-Bayley model presented the best fit for weight and height, both in boys and girls. Mean height growth trajectories were identical in shape and direction for boys and girls while the mean weight growth curve of girls fell slightly below the curve of boys after neonatal life. Finally, 35%, 27.7% and 8% of boys; and 34%, 38.4% and 4% of girls were estimated to be underweight, wasted and stunted at age 6 years, respectively.ConclusionThe growth parameters of the best-fitting Jenss-Bayley model can be used to describe growth trajectories and study their determinants.

scholarly journals A Novel Approach to Modelling Stand-Level Growth of an Even-Aged Forest Using a Volume Productivity Index with Application to New Zealand-Grown Coast Redwood

Forests ◽  
2021 ◽  
Vol 12 (9) ◽  
pp. 1155 ◽  
Author(s):  
Mark O. Kimberley ◽  
Michael S. Watt
Keyword(s):  
New Zealand ◽  
Growth Model ◽  
Growth Models ◽  
Stand Density ◽  
Site Index ◽  
Growth And Yield ◽  
Productivity Index ◽  
Site Quality ◽  
Spatial And Temporal Variation ◽  
Coast Redwood

Empirical growth models are widely used to predict the growth and yield of plantation tree species, and the precise estimation of site quality is an important component of these models. The most commonly used proxy for site quality in growth models is Site Index (SI), which describes the mean height of dominant trees at a specified base age. Although SI is widely used, considerable research shows significant site-dependent variation in height for a given volume, with this latter variable more closely reflecting actual site productivity. Using a national dataset, this study develops and describes a stand-level growth and yield model for even-aged New Zealand-grown coast redwood (Sequoia sempervirens). We used a novel modelling approach that quantifies site quality using SI and a volume-based index termed the 300 Index, defined as the volume mean annual increment at age 30 years for a reference regime of 300 stems ha−1. The growth model includes a number of interrelated components. Mean top height is modelled from age and SI using a polymorphic Korf function. A modified anamorphic Korf function is used to describe tree quadratic mean diameter (Dq) as a function of age, stand density, SI and a diameter site index. As the Dq model includes stand density in its formulation, it can predict tree growth for different stand densities and thinning regimes. The mortality model is based on a simple attritional equation improved through incorporation of the Reineke stand density index to account for competition-induced mortality. Using these components, the model precisely estimates stand-level volume. The developed model will be of considerable value to growers for yield projection and regime evaluation. By more robustly describing the site effect, the growth model provides researchers with an improved framework for quantifying and understanding the causes of spatial and temporal variation in plantation productivity.

scholarly journals On the use of growth models for forecasting epidemic outbreaks with application to COVID-19 data

2020 ◽  
Author(s):  
Chenangnon F. TOVISSODE ◽  
Bruno E. LOKONON ◽  
Romain GLELE KAKAÏ
Keyword(s):  
Growth Model ◽  
Growth Models ◽  
Exponential Model ◽  
Limited Data ◽  
Model Framework ◽  
Phase Dynamics ◽  
Epidemic Dynamics ◽  
Isolation Measure ◽  
Containment Measures ◽  
Model Curve

The initial phase dynamics of an epidemic without containment measures is commonly well modeled using exponential growth models. However, in the presence of containment measures, the exponential model becomes less appropriate. Under the implementation of an isolation measure for detected infectives, we propose to model epidemic dynamics by fitting a flexible growth model curve to reported positive cases and to infer the overall epidemic dynamics by introducing information on the detection/testing effort and recovery and death rates. The resulting modeling approach is close to the SIQR (Susceptible- Infectious-Quarantined-Recovered) model framework. We focused on predicting the peaks (time and size) in positive cases, actives cases and new infections. We applied the approach to data from the COVID-19 outbreak in Italy. Fits on limited data before the observed peaks illustrate the ability of the flexible growth model to approach the estimates from the whole data.

The moment ratios of particle size distributions in some simple growth models

1980 ◽  
Vol 17 (4) ◽  
pp. 956-967 ◽  
Author(s):  
H. L. MacGillivray
Keyword(s):  
Particle Size ◽  
Size Distribution ◽  
Growth Model ◽  
Hazard Rate ◽  
Growth Models ◽  
Size Distributions ◽  
Particle Size Distributions ◽  
Initial Size ◽  
The Moment ◽  
Simple Growth

Important parameters of particle size distributions in dispersed systems in engineering and related fields are ratios of moments and inverse powers of these ratios, known as mean sizes. The variation in these parameters is examined for the simplest growth model in which the size distribution is translated, and the results for this process considered in relation to the problems of models of other growth processes. For initial size distributions with monotone hazard rate, the results are particularly significant, and the properties of the normalised moments of other distributions are also considered.

Industrial Relations and Inequality in the EU

2021 ◽  
pp. 452-485
Author(s):  
Gerhard Bosch
Keyword(s):  
Industrial Relations ◽  
Negative Effects ◽  
Wage Setting ◽  
Wage Policy ◽  
Nation States ◽  
Wage Moderation ◽  
Wage Increases ◽  
Key Indicators ◽  
Distribution Of Income ◽  
The Eu

This chapter begins with a summary, based on a number of key indicators, of the evolution of industrial relations in Europe. The fundamental importance for the primary distribution of income of minimum wages and collective agreements is explained. The example of the interactions between minimum and collectively agreed wages is used to develop a typology of the various wage-setting ‘architectures’ in the EU. In a monetary union the debate on the appropriate wage policy cannot be conducted on a country by country basis. Wage moderation or expansive wage increases can have both positive and negative effects on other countries. Finally, the interventions by nation states and the Troika in collective bargaining systems will be investigated.

scholarly journals Unemployment, Factor Substitution and Capital Formation

2003 ◽  
Vol 4 (4) ◽  
pp. 475-495 ◽  
Author(s):  
Leo Kaas ◽  
Leopold von Thadden
Keyword(s):  
General Equilibrium ◽  
Equilibrium Model ◽  
Capital Formation ◽  
Wage Bargaining ◽  
Elasticity Of Substitution ◽  
Wage Setting ◽  
Dynamic General Equilibrium Model ◽  
Long Run ◽  
Factor Substitution ◽  
Adjustment Dynamics

Abstract We incorporate a wage-bargaining structure in a dynamic general equilibrium model and show how this feature changes short- and long-run properties of equilibria compared with a perfectly competitive setting.We discuss how employment, capital and income shares respond to wage-setting shocks and show that adjustment dynamics depend decisively on the magnitude of the elasticity of substitution between labour and capital. Values of the elasticity below unity add persistence, tend to preserve stability and lead to empirically plausible adjustment patterns. By contrast, values above unity introduce additional volatility, thereby making steady states potentially unstable.

The Rise of Segmented Neo-Corporatism in South America: Wage Coordination in Argentina and Uruguay (2005-2015)

2019 ◽  
Vol 52 (10) ◽  
pp. 1427-1465 ◽  
Author(s):  
Sebastián Etchemendy
Keyword(s):  
Latin American ◽  
Wage Bargaining ◽  
Substantial Portion ◽  
Wage Setting ◽  
Wage Policy ◽  
Left Turn ◽  
Incomes Policy ◽  
Latin American Left ◽  
American Left ◽  
Wage Coordination

Argentina and Uruguay are the only democracies in Latin America (among few in the world) that have developed sustained, state-oriented national and sectoral wage bargaining between employers and unions after 2005. The article defines “segmented neo-corporatism” as a new form of centralized incomes policy in the region that applies to a substantial portion (i.e., registered workers), though not to all the labor force. Drawing on neo-corporatist theory, I explain, first, why only Argentina and Uruguay could consolidate a centralized, national wage policy in the context of the Latin American Left-Turn. Second, I test empirically the degree of state-oriented wage coordination. The study argues that monetary policy deterrence and higher levels of bargaining centralization largely explain the greater capacity of Uruguayan neo-corporatism to govern wage-setting compared with its Argentine counterpart. Finally, the article puts segmented neo-corporatism in comparative perspective in the developing world and draws some theoretical implications.

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