Technological Effects on Wages and Labour: Classical and Neoclassical Ideas

2012 ◽  
pp. 97-124
Author(s):  
Anastassios D. Karayiannis ◽  
Ioannis A. Katselidis
Keyword(s):  
Technological Progress ◽  
New Technology ◽  
Marginal Productivity ◽  
Long Run ◽  
Rate Effects ◽  
Short Run ◽  
Real Wage Rate ◽  
Productivity Theory ◽  
The One ◽  
The 19Th Century

The introduction of new technology may have significant effects on the level of employment and the real wage rate; effects that have received considerable attention even from the economic thinkers of the classical period. This paper aims to analyze and evaluate the various views and arguments of early classical and neoclassical economists concerning the technological effects on wages and employment. On the one hand, the economists of the early decades of the 19th century (mainly between 1800 and 1840) had recognized and analyzed many of the effects of technology on labourers' welfare. On the other hand, early neoclassical theorists of the period between 1890 and 1935 tried to expand on the classical views and to develop their own theoretical arguments, based on new perceptions like the marginal productivity theory. The main conclusion drawn is that most of early classical and neoclassical economists recognized and specified the temporary adverse effects of new technology on labour (e.g. short-run unemployment), but, at the same time, they argued for the beneficial long-run consequences of technological progress on labourers' welfare.

Migration and US agricultural competitiveness

2013 ◽  
Vol 10 (2) ◽  
pp. 159-179 ◽  
Author(s):  
Philip L. Martin
Keyword(s):  
Farm Workers ◽  
Easy Access ◽  
Foreign Born ◽  
Guest Workers ◽  
Long Run ◽  
Short Run ◽  
Lower Wage ◽  
The Government ◽  
The One

Agriculture has one of the highest shares of foreign-born and unauthorized workers among US industries; over three-fourths of hired farm workers were born abroad, usually in Mexico, and over half of all farm workers are unauthorized. Farm employers are among the few to openly acknowledge their dependence on migrant and unauthorized workers, and they oppose efforts to reduce unauthorized migration unless the government legalizes currently illegal farm workers or provides easy access to legal guest workers. The effects of migrants on agricultural competitiveness are mixed. On the one hand, wages held down by migrants keep labour-intensive commodities competitive in the short run, but the fact that most labour-intensive commodities are shipped long distances means that long-run US competitiveness may be eroded as US farmers have fewer incentives to develop labour-saving and productivity-improving methods of farming and production in lower-wage countries expands.

scholarly journals The History of Technological Anxiety and the Future of Economic Growth: Is This Time Different?

2015 ◽  
Vol 29 (3) ◽  
pp. 31-50 ◽  
Author(s):  
Joel Mokyr ◽  
Chris Vickers ◽  
Nicolas L. Ziebarth
Keyword(s):  
Technological Progress ◽  
Industrial Revolution ◽  
Historical Period ◽  
Human Welfare ◽  
Economic Progress ◽  
Long Run ◽  
Cultural Anxiety ◽  
Short Run ◽  
History Of ◽  
Developed World

Technology is widely considered the main source of economic progress, but it has also generated cultural anxiety throughout history. The developed world is now suffering from another bout of such angst. Anxieties over technology can take on several forms, and we focus on three of the most prominent concerns. First, there is the concern that technological progress will cause widespread substitution of machines for labor, which in turn could lead to technological unemployment and a further increase in inequality in the short run, even if the long-run effects are beneficial. Second, there has been anxiety over the moral implications of technological process for human welfare, broadly defined. While, during the Industrial Revolution, the worry was about the dehumanizing effects of work, in modern times, perhaps the greater fear is a world where the elimination of work itself is the source of dehumanization. A third concern cuts in the opposite direction, suggesting that the epoch of major technological progress is behind us. Understanding the history of technological anxiety provides perspective on whether this time is truly different. We consider the role of these three anxieties among economists, primarily focusing on the historical period from the late 18th to the early 20th century, and then compare the historical and current manifestations of these three concerns.

scholarly journals On the Demise of the Long Run

1989 ◽  
Vol 3 (4) ◽  
pp. 149-152 ◽  
Author(s):  
Roy B Helfgott
Keyword(s):  
Economic Analysis ◽  
Computer Aided Design ◽  
New Technology ◽  
Computer Aided Manufacturing ◽  
John Maynard Keynes ◽  
Long Run ◽  
Single Function ◽  
Computer Aided ◽  
Short Run ◽  
Aided Design

John Maynard Keynes observed that, “In the long run we are all dead,” but in terms of economic analysis, the long run also may be dead. The culprit is new technology that is wiping out many of the distinctions between the long and short run. As pointed out by Alfred Marshall a century ago, the amount of time needed to adjust to changed circumstances has been what distinguished the two runs. New technology—computer-aided design (CAD) and computer-aided manufacturing (CAM)—is likely to telescope the long run into the short run, and possibly even into the immediate market period. The key to the new technology, of course, is that it can be reprogrammed to perform a different operation, and this versatility of the new “programmable” automation distinguishes it from the old “hard” automation, in which a machine could perform only a single function.

scholarly journals IN THE NAME OF THE FATHER: INHERITANCE SYSTEMS AND THE DYNAMICS OF STATE CAPACITY

2019 ◽  
pp. 1-28
Author(s):  
Èric Roca Fernández
Keyword(s):  
Theoretical Model ◽  
State Capacity ◽  
State Building ◽  
Gender Egalitarianism ◽  
European Tradition ◽  
Long Run ◽  
Indirect Impact ◽  
Short Run ◽  
Low Probability ◽  
The One

This paper examines how the degree of gender-egalitarianism embedded in inheritance rules impacts state capacity at its early stages during medieval times. We present a theoretical model in which building state capacity enables nobles to raise taxes and overcome rivals. The model addresses the use of inheritance to consolidate landholding dynasties, also accommodating interstate marriages between landed heirs. On the one hand, dynastic continuity—of utmost importance to medieval lords—directly encourages state-building. Male-biased inheritance rules historically maximize the likelihood of dynastic continuity. We weigh this effect against the indirect impact of the more frequent land-merging marriages under gender-egalitarian rules. Contrary to the literature, our results suggest that gender-egalitarian norms—offering a low probability of dynastic continuity—promote state capacity in the short run more than gender-biased norms. In the long run, results are reversed, providing a rationale for the pervasive European tradition of preference for men as heirs.

Rationality at the Brink: The Role of Cognitive Processes in Failures of Deterrence

1978 ◽  
Vol 30 (3) ◽  
pp. 345-365 ◽  
Author(s):  
Jack L. Snyder
Keyword(s):  
Cognitive Theory ◽  
Decision Makers ◽  
The Other ◽  
International Crises ◽  
Value Conflicts ◽  
Long Run ◽  
Short Run ◽  
The One ◽  
The Cost

Decision makers in international crises seek to reconcile two values: on the one hand, avoiding the loss of prestige and credibility that capitulation would entail and, on the other, avoiding war. These values conflict with each other, in the sense that any policy designed to further one of them will jeopardize the other. Cognitive theory suggests that in ambiguous circumstances a decision maker will suppress uncomfortable value conflicts, conceptualizing his dilemma in such a way that the values appear to be consonant. President Kennedy's process of decision and rationalization in the Cuban missile crisis fits this pattern. He contended that compromise would allay the risk of war in the short run only at the cost of increasing it in the long run. Thus, he saw his policy of no compromise as furthering both the goal of maintaining U.S. prestige and credibility and the goal of avoiding war.

scholarly journals EFFECT OF INSUFFICIENT CURRENCY IN CIRCULATION ON THE RATE OF INFLATION AND UNEMPLOYMENT IN NIGERIA: THE BUHARI’S ADMINISTRATION EXPERIENCE

2022 ◽  
Vol 5 (1) ◽  
pp. 25-47
Author(s):  
Topbie Joseph Akeerebari
Keyword(s):  
Exchange Rate ◽  
Money Supply ◽  
Unemployment Rate ◽  
Inflation Rate ◽  
Tax Revenue ◽  
Long Run ◽  
Lending Rate ◽  
Short Run ◽  
One Year ◽  
The One

This study investigated the effect of insufficient currency in circulation on the rate of inflation and unemployment in Nigeria: The Buhari’s Administration Experience; using annual time-series data ranging from 1985 to 2020. In achieving this task, the study was disaggregated into two models: model 1 utilizing Vector Error Correction Model to analyse the relationship between fiscal variables (government total expenditure, government tax revenue, and export) and unemployment rate. It was revealed from the unit root of Augmented Dickey-Fuller test that none of the (fiscal) variables was stationary at level, but they were all stationary after 1st Differencing. This made it necessary for the study to apply Johansen co-integration test which the estimated result indicated 1 co-integration equation as evidenced by Trace statistic. This also, necessitated the application of Vector Error Correction Model (VECM), and it was observed that it took 61.71% annual speed of adjustment towards long-run equilibrium from short-run disequilibrium for unemployment rate to return to equilibrium after a shock to fiscal variables. The results further explained that government total expenditure, and government tax revenue, had negative and insignificant impact on unemployment rate respectively, thereby reducing unemployment rate. Similarly, the estimated result indicated that export had positive impact on unemployment thereby increasing unemployment rate within the period under study. Similarly, in analysing monetary variables (money supply, exchange rate and prime lending rate) in model 2: Phillip-Peron unit root test was conducted and it was confirmed that the variables were of mixed order of integration which necessitated the employment of ARDL technique. The ARDL bounds testing result revealed that a long-run relationship existed between monetary variables, and inflation. It was found, in the long-run, that money supply caused inflation rate to rise. More so, the result further revealed that present level of exchange rate decelerated inflation rate in both long-run and short-run. While, it was further observed that the one-year lag and two-year lag of exchange rate increased rate of inflation in both log-run and short-run respectively. The estimated result further revealed that the present level of prime lending rate minimised the rate of inflation in the long-run and short-run. Whereas, similar results were further confirmed in the one-year lag and two-year lag that prime lending rate reduced inflation rate in both log-run and short-run. As a result of these findings, with respect to model 1; the study recommended that government should maintain the level of its expenditure and tax revenue as this reduced unemployment rate, and it should lower trade costs so that demand for labour would increase in the export industry, this would make aggregate unemployment rate to reduce. With respect to model 2; it recommended the adoption of contractionary monetary policy that would minimise the amount of money supply that caused long-run effect on inflation in the system. Furthermore, there should be proper maintenance of fixed exchange rate policy that will make exchange rate regime overcome non-military forces of demand and supply in exchange rate market, this will help maintain low rate of inflation.

The Determinants of Health Expenditures in Tunisia

2018 ◽  
pp. 253-267
Author(s):  
Sami Chaabouni ◽  
Chokri Abednnadher
Keyword(s):  
Health Expenditures ◽  
Determinants Of Health ◽  
Causality Test ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Capita Health Expenditure ◽  
Long Run ◽  
Ardl Approach ◽  
Short Run ◽  
The One

This article examines the determinants of health expenditures in Tunisia during the period 1961-2008, using the Autoregressive Distributed Lag (ARDL) approach by Pesaran et al. (2001). The results of the bounds test show that there is a stable long-run relationship between per capita health expenditure, GDP, population ageing, medical density and environmental quality. In fact, on the one hand there are the short-run and long-run results which reveal that health care is a necessity, not a luxury good. On the other hand, results of the causality test show that there is a bidirectional causal flow from health expenditures to income, both in the short and in the long run.

scholarly journals El impacto de los costes de despido sobre el empleo en España: Una estimación con datos de panel

2020 ◽  
Vol 30 (1) ◽  
pp. 137
Author(s):  
Marta Martínez Matute ◽  
Carlos Pérez Domínguez
Keyword(s):  
Dynamic Panel Data ◽  
The Other ◽  
Global Effect ◽  
Dynamic Panel ◽  
Firing Costs ◽  
Period 2 ◽  
Long Run ◽  
Short Run ◽  
The One ◽  
Firing Cost

This paper examines the effect of firing costs on the Spanish employment. On the basis of a theoretical model with two periods of time and firing costs, a regional dynamic panel data is estimated for the period 2005-2011. According to this model, two opposite effects take place: on the one hand, the presence of firing cost makes the employer more careful to hire new workers in the first period; but, on the other hand, the firing penalty makes the firm more reluctant to reduce employment in period 2. Then, the global effect of mandatory firing costs remains unclear. The main result obtained in our estimations is that higher firing costs would negatively affect employment in the short run, but in the long run this effect vanishes.

scholarly journals THE NEW ERA OF FINANCIAL INNOVATION: THE DETERMINANTS OF BITCOIN’S PRICE

2018 ◽  
Vol 33 (1) ◽  
pp. 46 ◽  
Author(s):  
Sukmawati Sukamulja ◽  
Cornelia Olivia Sikora
Keyword(s):  
Impulse Response Function ◽  
Financial Innovation ◽  
Vector Error Correction ◽  
New Era ◽  
Vector Error ◽  
Long Run ◽  
Price Growth ◽  
Short Run ◽  
The Government ◽  
The One

Financial innovation has entered a new era in which a digitalized system and cryptocurrency have been created. This paper examines the factors that influence the price movement of bitcoin. This is not a legal currency in Indonesia; the Indonesian government has not made any regulations legalizing bitcoin’s use, but it has also not issued any new laws to prohibit the trade in bitcoins and other digital currencies. The demand for, and price growth of, bitcoin are interesting matters to study, especially for Indonesians who still have questions about the progress of Bitcoin transactions and the factors that influent them. In Indonesia itself, without any protection from the government, the bitcoin price on December 14, 2017 had already reached more than IDR224.5 million, compare to IDR60 million in October 2017. Bitcoin is the first peer-to-peer currency, and was introduced by Satoshi Nakamoto in 2008. Since its inception, bitcoin has served more than 17 million users, including Indonesians. Bitcoin behaves in a different manner, compared to traditional currencies and the one that affects bitcoin’s price is its attractiveness for investors. The Vector Error Correction Model (VECM) is applied to analyze the short-term and long-term influences. VECM is used in this research because the data is stationary in the first difference and has a cointegration relationship. To make the interpretation clearer, the impulse response function and variance decomposition also are included in this research. The result indicates that the macroeconomic indicator, represented by the Dow Jones Industrial Average (DJIA), the demand for bitcoins and the gold price influence bitcoin’s price fluctuations in the short-run and long-run. Bitcoin’s supply does not influence its price fluctuation in the long-run but does influence it in the short-run. The implication of this research is bitcoin could compete as an alternative investment compared to the capital markets and gold.

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