Jürgen Meckl

Market power of firms and exchange-rate fluctuations

This paper explores the potential of firms to restrict industry outputs (market power) in oligopolistically organized markets where domestic firms compete with foreign ones. Within a stochastic price-setting supergame framework, market power is shown to be lower in general with flexible exchange rates for the following reasons. (i) The conditions that the fully collusive outcome—oligopolists maximizing joint profits — is sustainable in equilibrium become stronger if the exchange rate fluctuates, provided that fluctuations are sufficiently small. (ii) Even if full collusion can be sustained, industry outputs will be higher on the average with flexible than with fixed exchange rates.

Occupational Choice, Aggregate Productivity, and Trade

We propose occupational decisions of heterogeneous individuals as an alternative mechanism of explaining the distribution of firm productivities emphasized by empirical studies. Thus, we integrate the frameworks of Melitz (2003), and of Manasse and Turrini (2001) that establish the theoretical base of trade models with heterogeneous firms. Our model is technically much simpler than the Melitz approach while preserving the main results on firm-selection effects due to international market integration. Our approach paves the way for detailed analysis of institutions in a heterogeneous firm model to better understand the link between institutions and an economy’s productivity distribution.

Globalization, technical change and the skill premium: magnification effects from human – capital investments

This paper shows that endogenous adjustments in the composition of labour supplies magnify the effects of changes in commodity prices on the measured skill premium under quite plausible conditions. These composition effects arise from decisions of individuals with heterogeneous inherent abilities about acquiring human capital. They reinforce the well-known Stolper – Samuelson effect on the measured skill premium in countries with a sufficiently high relative supply of skilled labour, but compensate them otherwise. As a result, the model can account for the observation of a worldwide increase in the skill premium during the last two decades.

Efficiency‐wage Unemployment and Economic Welfare in a Model of Endogenous Growth

This paper examines positive and normative implications of efficiency-wage-induced unemployment within a model of endogenous growth. Sector-specific impacts of the wage rate on labour efficiency establish a correlation between the growth rate and the rate of unemployment. The sign of this correlation is determined by the intersectoral wage differential. Despite the existence of unemployment, decisive positive properties of the full-employment model are preserved. However, welfare implications of the full-employment model may be reversed. The optimal policy can be to reduce growth, while at the same time raising unemployment.

Qualitatively Rational Expectations and Adjustment in the Specific-Factors Model

This paper considers adjustment in a dynamic specific-factors model with endogenous capital stocks. Investment is analyzed under the assumption that expectations are rational with respect to qualitative aspects of the adjustment process (qualitatively rational expectations, QRE). QRE leave considerable scope for systematic errors in expectations formation. Adjustment under rational expectations is similar to QRE adjustment; however, only in the former case is the speed of adjustment optimal. Overshooting of capital stocks is possible and may be optimal. Comparative-static analysis shows an asymmetry between inflows of labor and capital: only capital inflows may cause a Rybczynski effect. Copyright 1998 by Blackwell Publishing Ltd.

Involuntary Unemployment and the Existence of GDP Functions

We develop a simple general equilibrium model of production where, despite the existence of involuntary unemployment, non-equalized job rents are the only distortion. Hence, a standard GDP function exists. Unemployment results from either efficiency wage setting or wage bargaining. Copyright Blackwell Publishing Ltd 2003.

Grüne, Blaue oder Rote Karte für Einwanderer?

Mit der Einfuhrung einer „green card“ fur hochqualifizierte Fachkrafte auf dem Gebiet der Informationstechnologie (IT) ist neue Bewegung in die (angeblich nicht existente) deutsche Einwanderungspolitik gekommen. Insbesondere die Industrie knupft hohe Erwartungen an die Mo glichkeit der Zuwanderung Hochqualifizierter; der aktuelle Mangel an Fachkraften gilt gemeinhin als Hemmschuh fur Konjunktur und Wachstum. Dem gegenuber stehen Vorbehalte seitens der inlandischen Arbeitskrafte, die eine Verschlechterung ihrer Arbeitsmarktchancen befurchten. Der vorliegende Beitrag untersucht, ob sich diese Befurchtungen im Rahmen einer realistisch (er) en Modellierung des Arbeitsmarktes erharten lassen. Gepruft wird auserdem, inwieweit die von der Industrie geforderten weitergehenden Liberalisierungsmasnahmen erfolgversprechend und konsensfahig sind. Im Lichte dieser weitergehenden Forderungen diskutieren wir generell die Einwanderung hochqualifizierter Arbeit ohne Beschrankung auf spezielle Gruppen.1

Balanced Trade and Investment

The paper considers intersectoral capital mobility in the context of investment theory. Convex costs of adjustment explain imperfect mobility of capital between sectors and generate adjustment over time due to exogenous shocks. Stocks of capital are endogenous. The paper analyzes adjustment in a small open economy without access to international financial markets. It is shown that the degree of intersectoral factor mobility and the intersectoral factor—intensity differential considerably affect adjustment to changing economic conditions on world markets.