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The Wage-Maximisation Property

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  • Christian Bidard

Abstract

For linear single-product models, the competitive long-run technique is wage maximising at a given rate of profit. The property is extended to multiple-product systems that satisfy an additional hypothesis called robustness. In particular, the nonsubstitution property implies that all prices are minimum in terms of wage. The result applies to several types of models, including production with fixed capital. On the robustness hypothesis, the wage-maximisation property can be seen as the counterpart in value terms of the golden rule.

Suggested Citation

  • Christian Bidard, 2020. "The Wage-Maximisation Property," EconomiX Working Papers 2020-17, University of Paris Nanterre, EconomiX.
    • Handle: RePEc:drm:wpaper:2020-17
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    File URL: https://economix.fr/pdf/dt/2020/WP_EcoX_2020-17.pdf
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    References listed on IDEAS

    as
    1. Christian Bidard, 2004. "Prices, Reproduction, Scarcity," Post-Print hal-03094334, HAL.
    2. Arrow, Kenneth J & Levhari, David, 1969. "Uniqueness of the Internal Rate of Return with Variable Life of Investment," Economic Journal, Royal Economic Society, vol. 79(315), pages 560-566, September.
    3. Fisher, Irving, 1907. "The Rate of Interest," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number fisher1907.
    4. Morishima, Michio, 1963. "Equilibrium, Stability and Growth: A Multi-Sectoral Analysis," OUP Catalogue, Oxford University Press, number 9780198281450.
    5. J. E. Stiglitz, 1970. "Non-Substitution Theorems with Durable Capital Goods," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 37(4), pages 543-553.
    6. Harcourt,G. C., 1972. "Some Cambridge Controversies in the Theory of Capital," Cambridge Books, Cambridge University Press, number 9780521096720, October.
    7. Bidard,Christian, 2011. "Prices, Reproduction, Scarcity," Cambridge Books, Cambridge University Press, number 9780521180191, October.
    8. J. A. Mirrlees, 1969. "The Dynamic Nonsubstitution Theorem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 36(1), pages 67-76.
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    More about this item

    Keywords

    Nonsubstitution; wage maximisation; golden rule; fixed capital; Sraffa.;
    All these keywords.

    JEL classification:

    • B24 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Socialist; Marxist; Scraffian
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D41 - Microeconomics - - Market Structure, Pricing, and Design - - - Perfect Competition
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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