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dc.contributor.authorKatsimi, Margaritaen_US
dc.contributor.authorKalyvitis , Sarantisen_US
dc.contributor.authorMoutos, Thomasen_US
dc.date.accessioned2009-10-21en_US
dc.date.accessioned2010-05-14T08:19:30Z-
dc.date.available2010-05-14T08:19:30Z-
dc.date.issued2009en_US
dc.identifier.urihttp://hdl.handle.net/10419/30430-
dc.description.abstractCasual empiricism suggests that unwarranted” wage changes, defined as the part of wage growth that is not explained by changes in labour productivity, are negatively associated with the return on capital. The main point of this paper is to show that unwarranted” wage changes have no causal effect on capital return. To this end, we show that standard theoretical models, in which unwarranted” wages changes and the return on capital are endogenously determined, do not necessarily predict a negative association between them. We then estimate aggregate net return on capital equations using panel data for 19 OECD countries for the period 1970-2000 in which we account for the endogeneity of unwarranted” wage changes by exploiting variations in institutional and labour market characteristics. We find that unwarranted” wage changes do not affect the return on capital. This result remains robust to alternative empirical specifications and to alternative definitions of profitability and unwarranted” wage changes. An implication of our findings is that standard calls for reforms aiming at wage moderation following the appearance of unwarranted” wage changes are not always justified.en_US
dc.language.isoengen_US
dc.publisherCESifo Münchenen_US
dc.relation.ispartofseriesCESifo working paper 2804en_US
dc.subject.jelE24en_US
dc.subject.jelE25en_US
dc.subject.ddc330en_US
dc.subject.keywordcapital returnen_US
dc.subject.keywordprofitsen_US
dc.subject.keywordunwarranted” wagesen_US
dc.subject.keywordproductivityen_US
dc.subject.keywordendogeneityen_US
dc.subject.stwLohnpolitiken_US
dc.subject.stwLohnniveauen_US
dc.subject.stwArbeitsproduktivitäten_US
dc.subject.stwKapitalertragen_US
dc.subject.stwGewinnen_US
dc.subject.stwArbeitsmarktflexibilisierungen_US
dc.subject.stwSchätzungen_US
dc.subject.stwOECD-Staatenen_US
dc.titleUnwarranted wage changes and the return on capitalen_US
dc.typeWorking Paperen_US
dc.identifier.ppn610763679en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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