Max Albert

Efficiency-Wage Unemployment and Intersectoral Wage Differentials in a Heckscher-Ohlin Model

Abstract The paper analyzes a Heckscher-Ohlin (HO) model with efficiency-wage unemployment (henceforth HOe model). We show that all HO results have close HOe analogues. Additionally, conditions are derived under which immigrants might not only find employment for themselves but also raise employment for natives. Moreover, we analyze the ranking of countries with respect to their rate of unemployment, showing that this ranking may be reversed as countries move from autarky to trade. All results are clearly linked to factor intensities and the pattern of intersectoral wage differentials.

Green Tax Reform and Two-Component Unemployment: Double Dividend or Double Loss?

The double-dividend argument (as used in political debates) addresses worries that a green tax may lead to higher unemployment when wages are inflexible. As protection against this possibility, it is proposed to use the proceeds of the green tax to subsidize employment. In the best case, this protects the environment and reduces unemployment (double dividend). However, even if the main cause of unemployment is a minimum wage, an additional efficiency-wage component (which explains certain stylized facts) can dominate employment effects. In the worst case, this leads to a double loss, which is impossible under pure minimum-wage 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.

Holistic experimentation versus decomposition: an ultimatum experiment

In phase I, every participant plays the ultimatum game with each of the other five group members. For each of five offers, it is learned how many participants in each group would have accepted it. In phase II, the pie is 30 times larger. Thus, response behavior can be explored in phase I and, with this information, possibly exploited in phase II. Neither game theory nor equity theory suggest such holistic experimentation. Seventy-four participants out of 91 engaged in experimentation by submitting different offers in phase I. The remaining 17 submitted equal offers as suggested by decomposition hypothesis.

Sectoral Structure and Unemployment in Open Economies

The paper considers efficiency-wage induced unemployment and investment in a small open economy. The short-run behavior of the economy is described by a specific-factors model with unemployment. It is shown that the unemployment rate crucially depends on the economy’s sectoral structure. Protection of high-wage sectors is likely to drive up unemployment; counterintuitively, immigration may reduce the rate of unemployment while investment may raise it. Long-run reactions, taking investment into account, can differ markedly from short-run reactions. Moreover, unemployment may be lower during adjustment than in the long-run equilibria before and after a shock.

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.