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Faculty of Business Administration and Economics, Philipps-Universität Marburg >
MAGKS Joint Discussion Paper Series in Economics, Universität Marburg >
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http://hdl.handle.net/10419/56538
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| Title: | | Efficiency-wage hypothesis and the operational production pattern  |
| Authors: | | Naqvi, Nadeem Schürg, Carolin V. |
| Issue Date: | | 2011 |
| Series/Report no.: | | Joint discussion paper series in economics 46-2011 |
| Abstract: | | An economy's production set is the collection of all net output vectors that the economy is capable of producing with a given technology and fixed quantities of primary factors of production. The boundary of this set is called the production possibility frontier or PPF. We show that, if the efficiency-wage hypothesis holds, a country's PPF, though conceptually valid, is an operationally irrelevant concept, because the economy never operates on the PPF, which is a view that ought to be appreciated in light of persistent unemployment in the new structure of economies of the post-21st-Century-crisis world. |
| Subjects: | | general equilibrium production set production possibility frontier efficiency wage economic policy labor market |
| JEL: | | A20 D50 E23 F11 J23 J31 |
| Document Type: | | Working Paper |
| Appears in Collections: | | MAGKS Joint Discussion Paper Series in Economics, Universität Marburg
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