Working Paper Series
Gunnar Eliasson and Thomas Lindberg
Economic Growth and the Dynamics of Wage Determination: A Micro Simulation Study of the Stability Consequences of Deficient Variation in Factor Prices and Micro Structures
Abstract: Swedish Manufacturing Industry is said to be
technologically and commercially in good shape. While Swedish wage levels
were higher than in all industrial countries in the mid-70s, wages -
expressed in international currencies - have now dropped to a mid-position,
and real rates of return are back to the average for the postwar period.
Given what empirical research on Swedish labor market behavior tells
us, the large devaluation in late 1982 should have been followed by strong
However, to understand recruitment and wage setting
decisions, one really needs a model in which firm pricing, production and
investment decisions are controlled by overriding profitability objectives
and where the rate of interest plays a role. The Swedish micro-to-macro
model is such a model.
Keywords: Economic growth; wage setting; micro-macro simulation model; (follow links to similar papers)
JEL-Codes: J31; L10; L23; (follow links to similar papers)
46 pages, August 1986, Revised August 1988
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