ISBN: 3790815209
TITLE: Makroeconomic Equilibrium and Internal Organization of Work
AUTHOR: Falkinger
TOC:

1. Introduction 1
1.1 A new theory 1
1.2 (Un)employment 3
1.3 Work organization and macroeconomic equilibrium 5
1.4 Skill bias and skill requirements 7
1.5 Other sources of unemployment 9
1.6 Main result and organization of the book 10
2. The basic model 13
2.1 Endowment, technology, demand and market structure 13
2.1.1 Labor supply 14
2.1.2 Organization technology 15
2.1.3 Production technology 17
2.1.4 Demand in the goods market 18
2.1.5 Firm behavior and equilibrium 18
2.2 Prices and production in the monopolistic competition equilibrium (stage 2) 20
2.2.1 The goods market 21
2.2.2 The labor market 23
2.3 The equilibrium provision of work places (stage 1) 27
2.4 The macroeconomic equilibrium: Summary and discussion 29
2.4.1 Equilibrium employment 29
2.4.2 The ratio of non-production labor to labor in production 32
2.4.3 Equilibrium prices and wages 32
3. Unemployability and involuntary unemployment 35
3.1 Equilibrium employment vs. efficient level of employment 36
3.2 Unemployment under wage rigidity 39
3.3 Market power of firms and rents for firm owners 43
3.3.1 The role of market power in a zero profit equilibrium 44
3.3.2 The role of rents for firm-owners 45
3.4 Employment when firms have uncertain expectations 48
3.4.1 Unanticipated shocks 48
3.4.2 Macroeconomic equilibrium and the state of long-term expectations 51
4. Equilibrium reorganization of work and aggregate level of employment 57
4.1 Employment under different organization technologies and the available range of abilities 59
4.2 Central coordination versus decentralized communication 63
4.2.1 Central coordination 63
4.2.2 Decentralized communication 65
4.3 The adoption of organization technologies by firms 67
4.4 Equilibrium employment after reorganization 69
4.4.1 Equilibrium with dominating reorganization technology 71
4.4.2 Equilibrium with non-dominating reorganization technology 72
4.5 Job creation, job destruction and lean management 76
4.5.1 Is reorganization harmful for employment? 76
4.5.2 Is reorganization successful in bringing down the ratio of non-production to production work? 77
4.5.3 Some remarks on the role of shareholder orientation and globalization for the reorganization of work 79
5. Skilled and unskilled labor 85
5.1 Skilled labor as a limiting factor 87
5.2 Extension of the basic model to two types of labor 90
5.2.1 Endowment and technology 90
5.2.2 Monopolistic competition at stage 2 93
5.2.3 The firms' provision of work places at stage 1 95
5.2.4 Aggregate employment and wages implied by the behavior of firms 96
5.3 Employment and skill structure of jobs in the macroeconomic equilibrium 97
5.4 The role of skill supply and technological change for the employment of unskilled labor 99
5.4.1 Supply of skilled labor and (un-)employment of unskilledlabor 100
5.4.2 The impacts of technological change 102
5.5 (Un)employment of skilled and unskilled labor when high-skilled workers have the power to acquire a rent 105
5.5.1 Rigidity of the relative wage of skilled labor 106
5.5.2 Rents of non-production workers 111
6. Capital and the provision of work places 117
6.1 Introducing capital into the basic model 118
6.2 Employment and interest rate in the macroeconomic equilibrium 121
6.3 Comparative-static analysis of the macroeconomic equilibrium 125
6.3.1 Equilibrium employment and interest rate as functions of capital supply 126
6.3.2 The effects of a change in the non-production requirements of organizing work 126
6.3.3 Size of the labor force and return on capital 132
6.4 The macroeconomic equilibrium when capital supply is elastic 134
6.4.1 Equilibrium in a perfect capital market 134
6.4.2 The impact of capital market imperfections on employment 135
6.5 Capital mobility and employment 137
6.5.1 Equilibrium in a small open economy 138
6.5.2 International equilibrium with and without capital mobility 140
7. Investment and savings. Supply-side vs. demand-side macroeconomic equilibria 151
7.1 The relationship between investment, savings and other macroeconomic variables 153
7.1.1 Macroeconomic relationships in a monopolistic competition equilibrium (stage 2) 153
7.1.2 Relationships between macroeconomic variables in a two-stage equilibrium 154
7.1.3 Equilibrium accumulation 155
7.2 Supply side vs. demand side in the equilibrium at stage 2 157
7.2.1 Full utilization of capacity 157
7.2.2 Underutilization of capacity when macroeconomic activity is constrained by effective demand 158
7.3 Equilibrium accumulation and equilibrium provision of jobs when firms are supply oriented 161
7.4 Equilibrium employment and equilibrium accumulation when firms have pessimistic demand expectations 165
7.4.1 Demand-determined two-stage equilibrium 165
7.4.2 Investment and savings in a demand-determined equilibrium 169
8. Summary 177
A. Appendix to Chapter 2 189
B. Appendix to Chapter 6 191
References 195
Author index 199
Subjectindex 201
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