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Can Market Power influence Employment, Wage Inequality and Growth?

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  • Alberto BUCCI

    ([n.a.])

  • Fabio FIORILLO

    (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)

  • Stefano STAFFOLANI

    (Universita' Politecnica delle Marche, Dipartimento di Economia)

Abstract

We introduce an efficiency wage mechanism into an innovation‐driven growth model. Due to asymmetric information problems the labour market is segmented and homogeneous workers may be employed either in the non‐competitive intermediate sector or in the competitive research sector. We analyse the impact that the monopoly position enjoyed by intermediate firms in the product market may have on employment, wage inequality and growth, and the sectoral distribution of workers. We find that the lower the product market competition in the capital goods sector, the higher the research employment, the lower the intermediate sector employment and the higher the growth rate. The relationships between growth and inequality, on the one hand, and between growth and employment, on the other, are both negative.
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Suggested Citation

  • Alberto BUCCI & Fabio FIORILLO & Stefano STAFFOLANI, 2000. "Can Market Power influence Employment, Wage Inequality and Growth?," Working Papers 141, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    • Handle: RePEc:anc:wpaper:141
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    Cited by:

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    4. Agénor, Pierre-Richard & Lim, King Yoong, 2018. "Unemployment, growth and welfare effects of labor market reforms," Journal of Macroeconomics, Elsevier, vol. 58(C), pages 19-38.
    5. Marcello MESSORI & Alberto ZAZZARO, 2004. "Monetary profits within the circuit: Ponzi finance oer "mors tua, vita mea"?," Working Papers 200, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    6. Manuela Magalhães & Tiago Sequeira & Óscar Afonso, 2019. "Industry Concentration and Wage Inequality: a Directed Technical Change Approach," Open Economies Review, Springer, vol. 30(3), pages 457-481, July.
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    8. Elvio MATTIOLI, 2003. "The measurement of coherence in the evaluation of criteria and its effects or ranking problems illustrated using a multicriteria decision method," Working Papers 199, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.

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    More about this item

    Keywords

    efficiency wages; endogenous growth; market power; research and development;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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