Index
Page numbers in italics denote tables, those in bold denote figures.
Acs, Z.J. 268n18
agency/economic agents 12, 13, 16, 20, 37; conventional model 15, 16; culture 99, 100, 101, 102; economic freedom and growth 166; Golden Rule productivity solution 24, 25; income inequality 67; institutional change, induced 185, 186, 187; path dependency theory 83, 84, 94, 95; unemployment insurance 259; x-efficiency and growth 42
aggregate demand 209, 210, 213, 214, 216, 218, 224
Aghion, P. 41, 60, 268n1, 273n6
Akerlof, George 4, 20, 23, 43, 45, 61, 67, 84, 86, 115, 142, 209, 219, 220, 223, 259, 265n1, 267n7, 270n5, 272n7, 277n15
Altman, Morris 3, 7, 10–13, 16, 20–1, 23, 29–30, 33–5, 36–8, 43, 45, 53, 56–8, 60–1, 63–4, 67–8, 84–6, 90–1, 99–103, 112, 115, 118, 123, 139, 141, 143, 151, 153–4, 157, 159–60, 167, 169, 183, 185, 189–92, 199, 201, 203, 205, 208, 219–20, 224, 229, 236, 241, 249, 253, 256–9, 261, 265n4, 267n5, 268n1, 269n10, 269n12, 270n7, 270n11, 272n1, 273n8, 275n2, 276n10, 277n3, 279n4; culture 272n5, 272n10; institutional change, induced 183, 185, 275n1, 275n3; path dependency theory 270n5, 270n9, 270n10; staples, 273n1, 273n2, 273n7, 274n9, 274n14
altruism 35
American Question 67
Argentina 160, 162, 164, 165, 182
Armington, C. 268n18
Arthur, Brian 79, 80, 82, 83, 84, 92, 94, 270n4
Atkinson, A.B. 247
Audretsch, D.B. 268n18
Australia 160, 162, 164, 165, 182, 211
average costs 15, 17, 101, 116, 260; globalization and labor power 139, 141; institutional change, induced 190; path dependency theory 81–2, 85; U-shaped average cost curve 87; x-efficiency and growth 42, 43; see also labor costs; unit production costs
axiomatic economics 6
Axiom of Modest Greed 67
“bandwagon effect” 235
Bangladesh 126
bargaining power 8, 13, 36–7, 53, 186, 227, 257; and behavioral model 28, 30; globalization and labor power 122–44
Barro, R.J. 41
Baxter, J.L. 239
Becker, Gary 32, 33, 97, 100, 189, 266n7, 271n1, 277n5
behavioral-institutional endogenous growth model and induced technical change 7, 38–58, 266–8n; conventional growth model and amendments 39–41; demand-side considerations 46; firm hierarchy 45, 50; labor market pressures, role 42–55; new growth theory 41, 55; sustainability of high wage growth 56–8; see also technological change
behavioral model 14, 15, 19–24, 37; conventional wisdom 29, 30, 35; culture 97, 101, 102; employment 219–26; globalization and labor power 138–43; Golden Rule 27–9; high wages 209–10, 226–7; implications of 29–36; income inequality 59, 68, 70–1, 72, 74, 75, 76, 269n11; neoclassical theory vs. behavioral economics 12; of path dependency see under path dependency theory; path dependency, behavioral approach to 83–92; shocking of entrepreneurs/firms 20; unemployment insurance 247, 259–60; see also behavioral-institutional endogenous growth model and induced technical change
Berry, C.J. 235
Biddle, J.E. 277n8
Binswanger, H.P. 46
black box of firm 5, 26; behavioral model and Golden Rule 27–9; cooperative determinants of x-efficiency 26–7; Golden Rule 24–5, 27–9; prisoner’s dilemma scenario 24, 25–6; private maximization 24, 25
Black Death 53
Blanchflower, D.G. 225
bounded rationality 189
Boyer, R. 270n2
Branson, W.H. 276n9
British Columbia 161
Buchanan, J.M. 272n9
Callender, Guy 147
Canada: Alberta 161; British Columbia 161; gadget industry 156, 157; Manitoba 161; Ontario 3–4, 160, 161; Quebec 3–4, 160, 161; Saskatchewan 161; staple theory 146, 147, 152, 156, 157, 160–1, 164; wheat boom 152, 155, 156–7, 160, 274n11, 274n14
capabilities 8, 106–21, 109, 123, 272–3n; basics of approach 108–11; conventional wisdom 109, 118; as determinant of economic welfare 114–18; famines/ famine avoidance 109, 110, 120; F-curve 112–13; functionings 111, 112, 114, 116, 118; social 56, 186, 268n16; and UN Human Development Index 107, 119–20; see also economic welfare; good life; well-being
capital stock, vintage 54
capital to labor ratio 39, 50, 153
Caves, R.E. 157
Chambers, E.J. 152, 155–7, 159, 160, 165, 274n9
Chang, H.J. 3
choice irrationality 28
Commons, John R. 13, 36, 38, 53, 58, 279n3
competitive long-run equilibrium 30, 31–2, 35, 104
“conspicuous consumption” 150
consumer preferences 14
consumer sovereignty concept 106
conventional growth model and amendments 39–41
conventional model of firm/conventional wisdom 7, 12, 13, 15–19, 36, 37; basic assumptions 186–7; and behavioral model 29, 30, 35; capabilities approach 109, 118; culture 99–100, 104; economic freedom 181; income inequality 59, 60, 66–70, 269n10; institutional change, induced 183, 184, 185, 186–7; and Marx 2–3; neoclassical theory 33–4; target income theory of labor supply 228, 229, 231–4; unemployment insurance 247, 251, 254, 259, 263; x-efficiency and growth 42, 44, 46; see also mainstream economic theory; neoclassical theory
convergence of low and high wage economies 14, 30, 58, 61; absence of 38, 41, 59–60, 100
Corporate Governance Index, World Bank 172, 179–80
Corruption Index see Index of Economic Freedom (IEF)
cost minimization 5, 16, 36, 43, 49
Costra Nostra 27
costs: average see average costs; labor see labor costs; nonpecuniary and pecuniary 32–3; pollution abatement 20, 33–4; production 17–18, 22; social 249; transaction 21, 184, 200; transportation 150; unemployment insurance 249; and x–inefficiency 4, 5; see also opportunity costs
Cowling, K. 278n10
credit market regulation 168
cultural differences 100
culture 271–2n; conventional wisdom 99–100, 104; defined 97–100; as determinant of material welfare 7, 96–105; and development culture 97; economic agents 99, 100, 101, 102; and economics 98–9; modeling 100–4; norms and values 105; utility maximization 99, 102, 271n1
cyclical unemployment 252
Darity, W.A. 276n14
Davenport, P. 276n12
David, Paul 79, 80, 82, 83, 84, 92, 94, 270n4
Davidson, P. 276n8
Dean, J.W. 270n6
demand-side considerations: aggregate demand 209, 210, 213, 214, 216, 218, 224; behavioral-institutional endogenous growth model and induced technical change 46, 53; institutional change, induced 195; non-homothetic demand 151; staple theory 146, 147, 148, 151, 154, 161; unemployment 209, 215, 216–18; unemployment insurance 249; see also supply-side considerations
democracy 108, 120, 121, 204–5, 207
Denmark 268n19
Development as Freedom (Sen) 120
development culture 97
diminishing returns 40, 41, 118, 153, 212
discrimination, labor market 14, 32, 33, 266n7
disequilibrium 32
Domar, Evsey D. 134–5, 188, 193, 271n14
Drakopoulos, S.A. 278n9
Duesenberry, J.S. 235
Dunn, L.F. 278n9
ecological rationality 184
economic agents see agency/economic agents
economic freedom 166–82, 274–5n; basic empirical results 169, 170, 171–2; Big Government sub-index 175, 181; conventional wisdom 181; definitions 166; Economic Regulation 173, 177; Freedom to Trade 168, 171, 176, 178–9, 180; and GDP 169–80; and governance correlation/slope coefficients 170; Government Size 168, 171, 172, 176, 178, 179; Labor Market Regulations 171, 172, 174, 177; Legal Structure 168, 173; Protection of Property Rights 168, 173, 174, 176, 177; slope coefficients 172–3, 181; Sound Money 168, 171, 174–5, 178, 179, 181; threshold effects 172–80
Economic Freedom Index (EFI) 8–9, 167–9, 181
economic globalization see globalization, economic
economic growth: behavioral model see behavioral model; and capabilities approach see capabilities; differential, constructing 145–65; and economic freedom 166–82; export-led, and staple theory 145–65; high rate and high wage economy 39, 62; income inequality 66; intensive, and staple theory 157–9; new growth theory 41, 55; poverty reduction 126; sustainability of high wage growth 56–8; transitory nature 39–40; and x–inefficiency 42–6; see also behavioral-institutional endogenous growth model and induced technical change; wage growth, high
economic linkages 150
economic rationality 99
economic welfare 1, 31, 50, 61, 109, 147, 195; capabilities and good life as determinants of 114–18; culture as determinant 7, 96–105; globalization and labor power 140, 142; see also economic welfare
Edgeworth Box diagram 68
efficiency wage theory 23, 36, 220; path dependency theory 87–8; traditional literature 267n7; unemployment insurance 279n6; unique wage rate 270n8, 272n7
efficiency wage theory and x-efficiency 4, 7, 13, 20, 38, 45, 61, 275n2; capabilities approach 115, 117
effort discretion 13, 16, 101, 190; behavioral model 20–1; cooperative determinants of x-efficiency 26, 27; path dependency theory 84, 91
effort inputs 12, 49, 140; black box of firm 26, 28, 29; capabilities approach 116–17; x-efficiency and growth 42, 44
effort maximization 16, 17, 20, 189
effort variability 4, 6, 42, 143, 189, 259; and behavioral model 34, 35, 36, 219–20
elites, economic 195, 197, 198–9, 200, 202, 203
employment: behavioral model 219–26; duration 251, 252, 254; full 39, 57, 210, 212, 213, 214, 222–3, 226; see also unemployment
endogenous growth models 42; see also behavioral-institutional endogenous growth model and induced technical change
entitlements, and capabilities 111–13, 117–18
equilibrium 52, 57–8, 61, 68; behavioral-institutional endogenous growth model and induced technical change 38, 39, 41, 44, 45, 47, 50; competitive 15, 22; competitive long-run 30, 31–2, 35, 104; Golden Rule 28; path dependency theory 80–1; Solow 40; target income theory of labor supply 240, 242
equilibrium wage 53
equity income/equity growth trade-off 60, 62, 68
ethical behavior 14, 15, 18–19, 35
export-led growth theory see under staple theory
externalities, positive 80, 123
factor prices, changes in 188, 269n10
Fagerberg, J. 268n16
fairness, socio-economic outcomes 5
famines/famine avoidance 109, 110, 120
Field, A.J. 267n6
firm hierarchy 45, 50, 102, 190; path dependency theory 84, 85, 93, 95
flexicurity 268n19
Foley, D. 268n1
forward linkages 149
Frantz, R. 270n6
Fraser Institute: Economic Freedom Index 167–9, 181; Free the World link 274n1
freedom: economic see economic freedom; good life as 120–1; individual 8; and technological change 23–4
Freedom of the World project (Fraser Institute) 167
Freeman, R.B. 276n13
full employment 39, 57, 210, 212, 213, 214, 222–3, 226
Galbraith, John Kenneth 74, 235, 269n6
Gigerenzer, Gerd 12
Gini coefficients 63, 64, 65, 75
globalization, economic 2, 8, 272n3; anti-globalization-trade-market hypothesis 122; bargaining advantage of masters 130–1; and behavioral model of firm 138–43; economic effects 136; elasticity of labor supply 133–4; Human Development Report (UN) 127–8; importance of institutions 132–8; institutional variables 123, 124, 125; and labor markets 194; and labor power 122–44; modeling effects 132–8; net effect 128; poverty reduction 126; product supply curve 137, 138; and Adam Smith 128–32; stylized facts 125–8; and unions 136–7; World Bank Development Report 125–7
goal setting theory 237
Golden Rule productivity solution 5; and behavioral model 27–9; black box of firm 24–5, 27–9; prisoner’s dilemma scenario 24, 25, 26, 27; and productivity maximization 14
Goldsmith, A.H. 276n14
good life 8, 106; as determinant of economic welfare 114–18; determinants 108–11; and entitlements, capabilities and functionings 111–13, 117–18; as freedom 120–1; see also capabilities; economic welfare
Gordon, D.F. 152, 155–7, 159, 160, 165, 274n9
Gottschalk, P. 63
Gross Domestic Product (GDP): and economic freedom 169–80; and income inequality 64, 65; see also per capita GDP
growth see economic growth
Habbakkuk, John 4, 23, 46, 61, 267n9
Hammermesh, D.S. 277n8
Hayami, Y. 46
Heckman, J.J. 277n1
Heritage Foundation 181; Index of Economic Freedom 167, 169, 172
hierarchy of needs 235, 236, 237, 241, 245, 256
high wage economies/firms 1; behavioral model 209–10, 226–7; and ethical behavior 18–19; growth see wage growth, high; and high growth rates 39, 62; high wage and low wage firms, simultaneous survival of 14, 22, 43–4; induced technical change 47, 48, 50; institutional change, induced 190, 196; saving, inequality and high wage economy 54–5; sustainability of high wage growth 56–8; unemployment 9, 209–27, 211, 275–7n; unemployment insurance 247; x-efficiency and growth 44; see also convergence of low and high wage economies
Himmelfarb, G. 271n3
Hollingsworth, J.R. 270n2
human capital 55, 75, 76, 98, 99, 250
Human Development Index (HDI), UN 125, 127, 169, 171; and capabilities approach 107, 119–20; and per capita GDP 171
Human Development Report (UN) 108, 119, 125, 127–8, 169
human resource management 31, 32
Humean fallacy 184
Ichniowski, C. 271n15
imperfect information, search unemployment 252–3
incentives 8, 13, 24, 29, 139, 166, 255; income inequality 68–9; sustainability of high wage growth 56–7
income distribution 68, 72–6, 107, 165; dynamic scenarios 197, 199; and economic efficiency 197; and linkages 150–1; Sector One 72, 73; Sector Two 74; staple theory and export-led growth 150–1, 165; see also income redistribution
income inequality 7, 68, 268–9n; artificial economies 72, 73; and behavioral model 59, 70–1, 72, 74, 75, 76, 269n11; conventional wisdom 59, 60, 66–70, 269n10; definitions of inequality 62–3; and economic prosperity 59–78; Edgeworth Box diagram 68; empirical research 63, 64–5; family income estimates 62; Germany 63; Gini coefficients 63, 64, 65, 75; and growth 66; income distribution 72–6, 73; and output variables 64; Pareto Optimality 60, 67, 68, 69, 72; and per capita GDP 65; persistent 269n11; Spearman rank correlation coefficients 64; stylized facts 59–60, 63–6; United States 63, 64
income—leisure choice 228, 229, 234, 245, 254; and unemployment insurance 255–7
income redistribution 61, 67, 68, 72; see also income distribution
Index of Economic Freedom (IEF) 167, 169, 172
Indonesia 65
induced institutional change, alternative theory 188–93; exemplified 193–201; see also institutional change, induced
induced technical change 46–53, 70
inefficiency, persistence 82, 92–4
inequality, defined 62–3; see also income inequality
inflation 218
Innis, Harold 146–9, 158, 273n3
input–output analysis 149
institutional change, induced 9, 275n11; alternative theory of induced institutional change 188–201, 206; assumptions of conventional model, microeconomic 186–7; conventional wisdom 183, 184, 185, 186–7; democracy 204–5; determinants 191–2; economic agents 185, 186, 187; elites, economic 195, 197, 198–9, 200, 202, 203; inducing and impeding institutional change 201–5; institutional change 205; labor rights 204; New Institutional Economics 187–8; preferences, governance and efficient institutional change 202–4; private property rights 201–2; product markets, opening up 201; sustainable 190–1
intensive growth, and staple theory 157–9
inverse-U hypothesis 60
involuntary unemployment 209, 210, 212–13, 227, 276n4
irrational behavior, assumptions of 6, 35
Japan 267n12
job search process 252, 253, 254, 255
Juster, F.T. 277n1
justice, Rawlsian notion of 110
Kaldor, N. 155, 267n5; embodied technological change 53–4
Kaufman, D. 235, 236, 277n4, 279n3
Keynes, John Maynard 25, 39, 209, 210, 226, 276n4, 276n5, 276n6; and demand side 216–18; General Theory 212, 213, 225; and real wage rate 212–15
Killingsworth, M.R. 277n1, 278n13
Korea 65
Krugman, P. 3, 6, 267n5, 270n1
Kuttner, R. 268n19
labor compensation 58, 115, 165, 226, 260, 267n9, 269n9; behavioral model 21, 22; culture 101, 102, 104; globalization and labor power 123, 128, 134, 143; income inequality 62, 67, 70, 74, 75, 77; induced institutional change theory 192, 194, 195, 199, 200; path dependency theory 85, 86, 87, 91, 93; unemployment insurance 259, 260, 261; x-efficiency and growth 43, 44, 47, 50
labor costs 39, 43, 76, 116, 190, 220, 262; conventional model 17–18; culture 101–2; globalization and labor power 139, 140, 141; induced technical change 47, 48; and production costs 47, 71; see also average costs
labor market discrimination 14, 32, 33, 266n7
labor market flexibility 169, 227
labor market intervention 130–1, 135
labor market pressures, role 42–55, 58; embodied “Kaldor” technological change 53–4; induced technical change 46–53; labor markets and output 52; revised model and new growth theory 55; saving, inequality and high wage economy 54–5; x-efficiency and growth 42–6
labor productivity see productivity
labor scarcity 135
labor supply 1, 6, 9–10, 11, 31, 53, 214, 223; conventional model 232–4, 252; elasticity 133–4; evolution, in terms of hours of work 241; globalization and labor power 133, 134, 135, 136; income—leisure choice 228, 229, 234, 245, 254, 255–7; induced institutional change theory 194, 195, 196, 197; staple theory 156; target income theory see target income theory of labor supply; traditional modeling framework 233; unemployment insurance 246, 253, 256, 257
Lamontagne, Louise 112, 115, 118
Lane, F.C. 202
Latham, G.P. 237
Lau, L.J. 267n12
Lebergott, Stanley 278n14
Leibenstein, Harvey: x–inefficiency concept 3, 4, 12, 13, 25, 26, 49, 265n1; and behavioral model 20, 21, 23; and capabilities approach 115; and culture 100–1, 272n6; and globalization and labor power 139; and income inequality 61, 269n11; and induced institutional change 189–90, 191; and path dependency 89, 270n6; and unemployment insurance 259
Leontief, Wassily 149
Lester, Richard 20
Lindert, Peter H. 169, 205, 275n4
linkages, economic 149–50, 151
Locke, E.A. 237
Lombard, M. 276n13
low wage economies/firms 1, 3–4, 7, 14, 15, 39, 123, 165, 270n9, 273n5; behavioral model 22, 24, 29, 30, 33, 36; culture 102, 104, 105; globalization and labor power 134, 140, 141; high wage and low wage firms, simultaneous survival of 14, 22, 43–4; income inequality 59–60, 61, 70, 74, 75, 76; induced institutional change, theory 186, 195, 198, 201; labor market pressures, role 43, 44, 45, 47, 48, 49, 50, 51; path dependency theory 85, 86, 88, 91, 93; sustainability of high wage growth 56, 57, 58; technological change 50; unemployment insurance 259, 260; see also convergence of low and high wage economies; high wage economies/firms
Lucas, R.E. 41
macroeconomic policies 9, 39, 53, 77, 209–27, 211; sustainability of high wage growth 57–8; and unemployment 209, 210
Maddison, A. 160
mainstream economic theory 13, 14–15; see also conventional model of firm/ conventional wisdom; neoclassical theory
Manitoba 161
Marcuzzo, M.C. 276n6
marginal product of labor (MPL) 214, 215
market economies 1, 3, 14, 62, 68, 99, 123, 137, 208; advanced 210, 211; developed 242, 247; free 181; monetized 226
market pressures, and high rates of growth 39
market wage, and unemployment 257–63
Maslow, Abraham 235; see also hierarchy of needs
material welfare see economic welfare
McCombie, J.S.L. 276n6
Meltzer, A.H. 276n14
Michl, T.R. 268n1
Micklewright, J. 247
microeconomic assumptions 186–7
minimum wages 31, 53; income inequality 74, 77; legislation 19, 20, 29, 30
monitoring 26
moral sentiments 5
Moynihan, Daniel Patrick 97
multi-income class model of economy 54–5
Murphy, K.M. 273n6
Myrdal, G. 266n5
needs 241, 245; hierarchy of 235, 236, 237, 256; ladder of 236; unsatisfied 235, 244
Nelson, R.N. 268n16
neoclassical theory: analytical framework 33–4; vs. behavioral economics 12; effort fixity 16; neoclassical assumptions, as incorrect 12–13; and path dependency theory 80, 87, 88; perfect competition 56; staple theory 152–5; target income theory of labor supply 277n5; unemployment insurance 257; x-efficiency and growth 42, 44; see also conventional model of firm/ conventional wisdom
New Economic Geography 267n5
New Institutional Economics (NIE) 166, 167; institutional change, induced 183–4, 185, 187–8, 192, 195, 200–1, 202, 204
New Zealand 160
nominal wages 4
North, Douglass 39, 92–3, 104, 166; institutional change, induced 183, 184, 185, 187, 188, 189, 193, 202, 204; staple theory and export-led growth 149, 150, 151, 165, 274n12
Olson, Mancur 166, 184, 185, 204
Ontario 160, 161; Quebec compared 3–4
opportunity costs 32, 104, 198–9, 232
Oswald, A.J. 225
output variables, and income inequality 64
Pakistan 126
Parente, L. 51, 166, 167, 185, 268n2
Pareto Optimality 110, 143, 261; income inequality 60, 67, 68, 69, 72; institutional change, induced 196, 197
path dependency theory 7, 79–95, 270–1n; behavioral approach to path dependency 83–92, 95; conventional 81, 82; Curves 1 and 2 81–2, 88–9; David and Arthur 79, 80, 82, 83, 84, 92, 94, 270n4; economic agents 83, 84, 94, 95; globalization and labor power 123; inefficiency, persistence 92–4; institutional change, induced 199, 200; Liebowitz and Margolis 82–3, 91–2; and neoclassical theory 80, 87, 88; standard approaches and criticisms 80–3; and technological change 90; unique wage rate 270n8; x-efficiency and growth 45
PCGDP (per capita GDP) see per capita GDP (PCGDP)
per capita GDP (PCGDP) 119; behavioral-institutional endogenous growth model and induced technical change 38, 39, 41; economic freedom and GDP 169, 171, 172, 173; income inequality 63, 64, 65, 66; international comparisons 162–3; staple theory 145, 146
perfect competition, neoclassical ideal 56
Perlman, M. 270n6
physical capital 41
Pigou, Arthur Cecil 61, 68–9, 70, 269n8
pollution abatement costs 20, 33–4
preferences 14, 24, 28–9, 35, 187, 236; changes to 229, 233; heterogeneous 185–6; institutional change, induced 185–6, 187, 189, 202–4
Prescott, E.C. 51, 166, 167, 185, 268n2
price-employment space 217
principal—agent problems 16
prisoner’s dilemma scenario 24, 25–6, 27, 198
private maximization (P-max) 24, 25
private property rights see property rights, private
production: basic function 139; capitalism as predominant mode 99; neoclassical assumptions as incorrect 12–13; traditional function 83; x–inefficient levels 86
production costs 20, 33; conventional model 17–18, 19; and labor costs 47, 71; see also unit production costs
production possibility frontier (PPF) 51, 52, 53, 66, 99, 103, 257; institutional change, induced 196–7
productivity 24, 212, 227; capabilities approach 116–17; increasing 43, 45, 47, 50; maximization 14, 99–100
product markets, opening up 201
profit maximization 4, 18, 22, 34, 202, 220; and utility maximization 84
property rights, private: behavioral-institutional endogenous growth model and induced technical change 39, 52, 56; economic freedom and growth 166; institutional change, induced 184, 185, 201–2, 204; security of 168
Protestant Ethic and the Spirit of Capitalism, The (Weber) 96
punishment 26
purchasing power parity (PPP) 119, 169
quasi-rationality 220
Quebec 160, 161; Ontario compared 3–4
rational behavior 36, 99, 100, 184, 189, 237; mainstream economic theory 14–15; neoclassical efficiency 12, 13
Rawls, John 110
real wages 209–10, 212–15; downward stickiness 209, 226; US manufacturing 230
regression analysis 247
regulation of credit, labor and business 168, 171
relatively x-efficient PPF (XEXE) 52
religion, and capitalism 98
rent-seeking activities 51
research and development (R&D) 55
residentiary industries 150
Reynolds, L.G. 273n5
Robbins, L. 277n7
Rothschild, Kurt 13
Sachs, J.D. 273n5
Sala-i Martin, X. 41
Salter, W.E.G. 46
Samuelson, P.A. 277n15
Saskatchewan 161
satisficing 189
savings 45, 150; saving, inequality and high wage economy 54–5
Schmid, G. 248
Schumpeter, J.A. 83
search unemployment 252–5, 263
self-interest 13, 35, 124; institutional change, induced 184, 185
Sen, Amartya 8, 106–13, 115, 119, 120–1; Development as Freedom 120; see also capabilities approach and economic welfare
serfdom 134
Shapiro, C. 279n6
shocks, random 80
short-run output 16
Simon, Herbert 12, 13, 265n1, 265n2
slavery 93, 134, 270n12, 271n13
Smeeding, T.M. 63
Smith, Adam 3, 5, 31, 36, 53, 61, 206–7, 265n3, 265n6; globalization and labor power 124, 128–32, 136, 142, 143–4; Wealth of Nations 2, 13, 128
Smolensky, E. 276n8
social assistance see unemployment insurance
social capabilities 56, 186, 268n16
social costs 249
socio-economic well-being 169; capabilities approach 106, 107, 108–9, 111; globalization and labor power 122, 123–4, 143; see also capabilities; good life
Solow, Robert 23, 153, 219–20, 277n2, 277n15, 278n12
Solow model 38, 58, 266n3; conventional growth model and amendments 39, 40, 41; embodied “Kaldor” technological change 53–4; staple theory and export-led growth 153, 154, 155; x-efficiency and growth 42, 46, 50
Spearman rank correlation coefficients 64
Stafford, F.P. 277n1
staple theory and export-led growth 8, 145–65, 273–4n; Canada 146, 147, 152, 156, 157, 160–1, 164; causal relationships between exports and economic growth 157, 165; Chambers and Gordon 152, 155–7, 159, 160, 165, 274n9; criticisms of staple theory 152; export booms 154; Innis, legacy of 146–9; and intensive growth 157–9; linkages, economic 149–50; local industry development 150–1; neoclassical context 152–5; protections 159; refined 149–52; returns to scale 153, 155; Solow model 153, 154, 155; statistics 160–4, 162–4; stylized facts 145; technological change 153–4; two sector economy assumption 156; underlying assumption 146; Verdoorn’s Law 155, 267n5; wheat boom, Canada 152, 155, 156–7, 160, 274n11, 274n14
Stiglitz, Joseph 23, 87–8, 259, 265n1, 279n6
Strom, S. 248
structural unemployment 252
Sub-Saharan Africa 126
substitution effects 229, 232, 240, 245
supply-side considerations 189, 210, 249; behavioral-institutional endogenous growth model and induced technical change 53, 58; staple theory 146, 147, 148, 154, 158, 161; target income theory of labor supply 278n11; see also demand-side considerations
target income theory of labor supply 9–10, 228–45, 230, 246, 253, 277–8n; analytical implications 240–5; backward bending labor supply curve 238; common characteristics of conventional and revised model 231–4; conventional wisdom 228, 229; duration of unemployment 256; female participation 245, 278n13; indifference curve 232, 236, 240; labor supply curve, modeling 237–9; nonmarket activities/time 231, 232, 234, 235, 236, 237, 241, 243; revised model 234–7; substitution effects 229, 232, 240, 245; target income and actual income 235; utility maximization 231, 232, 237, 240; see also labor supply
technological change 23–4, 41, 90, 123, 262; endogenously determined 90–1, 123, 124, 141, 142, 262; exogenously determined 90, 153, 156, 157; income inequality 71, 72; induced 46–53, 70; staple theory and export-led growth 153–4; see also behavioral-institutional endogenous growth model and induced technical change
Temple, J. 268n1
Thailand 65
Thomas, R.B. 187, 188, 193, 202
Tocqueville, Alexis de 271n3
Tomer, John 21
trade unions see unions
transaction costs 21, 184, 200
transportation costs 150
trust 26
two-class model of economy 54
ul Haq, Mahbub 107
ultimatum game 266n8
unemployment 74, 211; behavioral model and employment 219–26; definition of unemployment rate 250; demand side 216–18; duration 251, 256, 257; and high wages 9, 209–27, 211, 275–7n; insurance see unemployment insurance and economic efficiency; involuntary 209, 210, 212–13, 227, 276n4; IS-LM framework 217; long-run rate 250–2; and market wage 257–63; real wage rate 212–15; search 252–5, 263; trend or structural vs. cyclical 252, 254
unemployment insurance 6, 10, 53, 278–9n; behavioral model 247, 259–60; coefficients 251; conventional wisdom 247, 251, 254, 259, 263; costs 249; demand-side effects 249; duration of unemployment 252, 256; economic agents 259; and economic efficiency 246–64; empirical context 247–50; income inequality 77; and income-leisure choice 255–7; and labor market 262; long-run unemployment rate 250–2; market wage and unemployment 257–63; OECD countries 247–8; programs 254, 255, 256, 263; safety net effect 249; search unemployment 252–5
unions 53, 136–7; behavioral model 29, 30–1; income inequality 74, 77
United Nations (UN) 63; Human Development Index 107, 119–20, 125, 169, 171; Human Development Report 108, 119, 125, 127–8, 169
United States: economic development, nineteenth century 267n9; hours worked per week 229, 244; income inequality 63, 64; manufacturing 229, 230; real income per family 245
unit production costs 5, 6, 57, 122, 191, 269n10, 270n8; behavioral model 21, 22, 23, 33, 34, 35; capabilities approach and economic welfare 114, 117; conventional model 17, 18; globalization and labor power 139, 140; induced technical change 48, 51; path dependency theory 86, 89, 90, 91, 92; x–inefficiency and growth 36, 43, 44, 45; see also average costs; costs; production costs
Universal Declaration of Human Rights (UDHR) 272n2
Urquhart, M.C. 160
utility maximization 28, 84; and culture 99, 102, 271n1; institutional change, induced 184, 185, 186, 200; search unemployment 253; target income theory of labor supply 231, 232, 237, 240; unemployment insurance 256
utilization function 112
wage growth, high 1–11; sustainability 56–8; wait and hope for a better tomorrow approach 3; see also under unemployment
wage increases 18, 19, 238–9, 243, 261
wage inequality see income inequality
wants, unsatisfied 235
Warner, A.M. 273n5
wealth maximization 99
Wealth of Nations (Smith) 2, 13, 128
well-being 109, 111–12; socio-economic see socio-economic well-being; see also capabilities; economic welfare; good life
wheat boom, Canada 152, 155, 156–7, 160, 274n11, 274n14
Williamson, Oliver E. 183, 184
Witt, U. 270n4
work ethic 99; Weberian 103, 104
World Bank 63, 137, 169; Corporate Governance Index 172, 179–80, 180; World Development Report 125–7, 128, 136
Wright, G. 268n16
x-efficiency: and behavioral model 21–2; classic model 4; cooperative determinants 26–7; definitions 66; and efficiency wage theory see efficiency wage theory and x-efficiency; Golden Rule productivity solution 25; and growth 42–6; and induced institutional change 189–90; modified model 3; see also Leibenstein, Harvey: x–inefficiency concept; x–inefficiency
x-efficient technological change related PPF (TfTg) 52
x-inefficiency 13, 28–9; and behavioral model 20, 21; and costs 4, 5; definitions 20; imperfect product markets 189–90; income inequality 76; induced technical change 49; institutional change, induced 199–200; private maximization 25
Yellen, J.L. 20, 23, 43, 45, 61, 67, 84, 86, 219, 220, 223, 259, 265n1, 270n5
zero-sum game: and capabilities approach/ good life 109, 110, 114; globalization and labor power 122; income redistribution as 67, 76