Steve Dowrick

Union-Oligopoly Bargaining

A model is developed highlighting interactions between firm-level union-employer bargaining and industry-level oligopolistic price-setting, combining models of parametric conjectural variation oligopoly and asymmetric Nash-bargaining. Wages can only be bargained up if product market behavior is noncompetitive or if unions act on an industry-wide basis. If bargaining is efficient, wages are monotonically increasing in product market collusion, but the relationship may be reversed if bargaining covers only the wage. The relationship between profit markets and wages and some macroeconomic implications are explored. Copyright 1989 by Royal Economic Society.

Industrialisation, Catching Up and Economic Growth: A Comparative Study across the World's Capitalist Economies

Various hypotheses are examined seeking to explain inter-country convergence at the upper end, but divergence at the lower end, of the world income rankings. A model of disequilibrium growth with sector-specific technological progress and spillover is developed and then estimated on two samples of capitalist economies 1960-85. It is found that the degree of disequilibrium between agriculture and industry is greatest in the least developed economies, but their rate of labor transfer has been slow. Technological spillover has stimulated productivity growth in less developed agricultural sectors, but not in the industrial sectors of the least developed economies. Copyright 1991 by Royal Economic Society.

Technological Catch Up and Diverging Incomes: Patterns of Economic Growth 1960-88

The pattern of worldwide economic growth over the last three decades displays diverging growth paths. Most economies shared the experience of high growth rates in the I950S and I96os, reverting in the 1970S and I98os to rates which are more normal by historical standards. At the same time, however, income disparities across the national economies of the world have been widening. The richer economies have, in per capita terms, been growing faster than the middleincome economies, which in turn have outpaced the poorest economies. Moreover, within each of these broadly defined groups, income levels have been diverging. The divergence of growth paths of GDP per capita is perhaps surprising. The post-war period has witnessed an explosion in world trade, communications and the dissemination of information - all factors which might be supposed to both encourage and enable the technologically backward economies to learn from and adopt the production techniques of the more advanced. At the same time, the integration of capital markets, the emerging dominance of transnational corporations and the development of both transport and communications technology might be expected to lead to growth-enhancing investment in the poorer, low-wage economies. The first of these conjectures is supported by an analysis of the sources of economic growth. There is indeed evidence to support the technological spillover hypothesis: the less advanced economies have tended to experience faster growth in multi-factor productivity (although not necessarily with respect to manufacturing technology in the poorest economies). It appears, therefore, that income divergence has occurred in spite of technological catching up. The proximate causes are lower rates of investment in the poorer countries allied to declining rates of labour force participation in the poorer countries and rising participation in the richer countries. There are several explanations for the divergence of the growth paths of

Swedish Economic Performance and Swedish Economic Debate: A View from Outside

The papers by Korpi, Henrekson and Agell raise important questions both about the Swedish economy and about the way in which evidence on economic growth should be handled in debate on economic policy. I want to comment in particular on the fundamental question of whether the international evidence allows us to judge that Swedish growth has been below par. The papers raise two further questions. On the first whether growth is inhibited by high taxation and a large welfare state, the hallmarks of the post-war Swedish economy Agell provides as good an assessment of the cross-country macroeconomic evidence as we can probably hope to get at the moment: unproven. On the final vexed question of whether the structure of the economics profession has been inimical to open debate, I have only a few comments to make. Let me start with the criteria and method by which we should attempt to assess relative economic performance. This is a methodological minefield. There are numerous paths leading to divergent conclusions. The least we can do is to be explicit about our choices and subject our provisional conclusions to some checks for robustness. What performance measure is relevant? We could look at GDP or consumption, scaled per head of population or per member of the workforce or per hour worked. What deflators do we use? We can reduce measures denominated in local currency to a common unit using exchange rates or using fixed international prices or using utility-based indexes. Which derivative of the performance measure do we use? We might want to compare levels or rankings, or we might choose to assess relative rates of growth, or even relative changes in growth rates? Which time period is relevant? In particular, comparisons of growth rates are often very sensitive to choice of start and end years when business cycle fluctuations are asynchronous. What is the reference pointfor assessing underor overachievement? The definition of par might be either the best performance or average performance, for some group of countries for some period of time. Finally, what exogenousfactors are to be taken into account? We might wish to control for the influence on our preferred performance measure of a wide range of factors which are extraneous to the policy question under examination. I will take a brisk jog through this minefield, explaining briefly some of the choices which seem most relevant to the problem in hand but without attempting a full exposition of the problems. The most usual starting place is to choose real GDP per capita as a measure of aggregate performance. This