Efficiency Wages.
Efficiency Wages In efficiency wage models, firms choose to pay high wages to reduce turnover, eliminate shirking, increase morale, or in other ways enhance productivity. If wages exceed the market-clearing rates, unemployment results. Any further increase in wages, caused by some government policy, would likely worsen the unemployment problem but also further enhance productivity. Combining the two effects, would the wage increase raise or lower output and welfare? In other words, where and where not you would expect firms to pay efficiency wages? That is the question this paper seeks to answer. Economists typically assume that the efficiency wage is too high and so leads to unemployment that is also too high. Regarding a model of costly labor turnover, Stiglitz1 writes, firms are likely to pay too high wages. But it should be emphasized that it is possible that the competitive wage is too low. Since the 1970s, the persistently high unemployment rates in many industrial economies have made more and more economists believe that involuntary unemployment is one of the major stylized facts of modern economies. Therefore, a satisfactory macroeconomic labor model should explain well such a stylized fact. The efficiency wage theory has in recent years generally been regarded as a powerful vehicle for explaining why involuntary unemployment has persisted in the labor market. In
The EUs policy in the past has been strongly orientated towards market liberalisation. Using examples discuss the likely dangers of greater interventionism by the member states in recent times
The EU´s policy in the past has been strongly orientated towards market liberalisation. Using examples discuss the likely dangers of greater interventionism by the member states in recent times Table of Content Introduction 3 An overview about the financial and economic crisis in the past 3 The market liberalisation model 4 From market regulation to market deregulation 5 Why did the EU states support the market liberalisation model? 6 The danger of greater intervention 7 * Automobile industry..................... 8 * Finance industry 14 Conclusion 14 Reference List 15 Bibliography 17 Introduction This topic was chosen, because everybody normally thinks that state interventionism is good and sometimes really necessary to support a country. Nobody would directly know that it could also have dangers, this is the reason for this topic to get more information's about it and what for dangers it has. This topic would show some examples to highlight the disadvantages and advantages. An overview about the financial and economic crisis The finance crisis has his beginning in the US-American subprime market. "Subprime-credits" are credits, which are consciously giving to consumers with lower reliability. Although the finance givers have to book regular failures, so-called "lame credits", these losses are contra financed calculated and budgeted with dear interests and
Discuss the differences between Fordist and Post-fordist work?
Discuss the differences between Fordist and Post-fordist work? The question invites us to discuss the differences between fordism and post fordism. Fordism is way in which production is organised in "high period of industrial manufactures in the C20th and early 1970s" [1] and is mainly mass production. Post Fordism is due to the emergence of cultural and economic changes it's more of specialisation in products rather then mass production of fordism. I will go through and look at the differences between fordism and post fordism and then I will conclude whether a difference actually exists. Fordism was derived from the Henry Ford away from skilled, craft production to mass production. Ford didn't invent mass consumption but he realised it meant that new forms of modern psychology and labour management. This help to create new markets due to economies of scale and large organizations build upon functional specialization and divisions of labour. The system was known as standardization standardized components, manufacturing processes, and a simple, easy production process for standard product. Standardization required nearly perfect interchange ability of parts to achieve its ability; Ford exploited the need of technology by using machine tools and gauging systems. These innovations made possible the moving, or continuous, assembly line in which each assembler performed a single,
Managerial Economics
Contents . Executive Summary 2. Introduction 3. Critical Economic Indicators a. Competition and markets b. Market demand and understanding the consumer c. Market supply and understanding the company's costs d. Economic growth and business cycle e. Capital accumulation and technological progress f. Role of Government, regulation and fiscal policy g. Role of Government and monetary policy h. Foundations of International trade i. Market structures and company strategies 4. Background Economic Indicators a. Market analysis, failure and responses b. Labour markets and Unemployment 5. References & Bibliography 6. Appendix 1 7. Appendix 2 8. Appendix 3 Executive Summary As one of the world's leading banks and second largest Swiss bank, Credit Suisse provides its clients with investment banking, private banking and asset management services worldwide. Credit Suisse delivered a record performance in 2006, net income for the year increased by 94 percent to CHF 11.3 billion1. The new integrated banking model proved successful and enabled it to capture the growth opportunities resulting from high level of client activity. In addition to maintaining a close proximity to its client in mature markets, Credit Suisse is also committed to growing its footprint in emerging markets in order to meet the increasing demand for innovative and integrated financial services and
Efficiency Wage Models of Unemployment.
Efficiency Wage Models of Unemployment An important question considered in this essay is why do labour markets not clear when involuntary unemployed people are willing to work at less than the going rate? Surely cutting wages would be profitable to the firm? Business cycles are characterised by involuntary unemployment. In the presence of involuntary unemployment, firms may find it unprofitable to cut wages. The efficiency wage hypothesis describes how the productivity of workers depends on the real wage paid. Firstly, lets consider a perfectly competitive market where firms can hire as many workers as they like. To maximise profits the firm will pay a real wage that reflects the effort of its workers, this minimising labour cost per efficiency unit. Unemployed people would prefer to work at this real wage or lower but because a wage cut would discourage current employees, reducing their productivity, then firms do not hire people at this real wage or at any lower wage. This situation explains involuntary unemployment in the labour market. The first implication of the wage efficiency hypothesis that we can look at is real wage rigidity. Real shocks, which shift the marginal product of labour, may alter employment but leave the real wage unchanged. In other cases, shocks will have an impact on the real wage but not sufficiently to leave unemployment unaltered. Dual labour
Anti-Globalisation Movement and World Trade Organisation.
Candidate Number: 33456 MSc in the Faculty of Economics (Development Management) 2003 Dissertation submitted in partial fulfilment of the requirements of the degree Anti-Globalisation Movement and World Trade Organisation: Genesis of the Transnational Advocacy Networks and Social Movements and their scope for future Word Count: 9, 855 TABLE OF CONTENTS Introduction............................................................................... 2 Part-I: Social Movements and Transnational Advocacy Networks: Genesis and Evolution of the Anti-Globalization Social Movements - A Conceptual Frame Work 5 .1 Global Social Movements - Contentious Collective Action And the Rationality of Protest. 5 .2 Anti-Globalization Social Movements (AGSMs) and Transnational Advocacy Networks (TANs) 8 .3 The Anti-Globalization Social Movements - History and Evolution 10 Part-II: The Transnational Advocacy Networks - How do They Work?................................................................. 16 2.1 TANs - The Political Opportunity and Resource Mobilization Models. 17 2.1.1 The Political Opportunity Structure Model 17 2.1.2 The Resource Mobilization Model 19 2.2 How Do the TANs Work? 21 2.3 The Transnational Advocacy Networks - an Assessment 25 Part-III: The Anti-Globalization Social Movements -
Are trade unions in terminal decline?
Are trade unions in terminal decline? Introduction Trade unions are organised groups of workers. Their primary objectives are to improve the pecuniary and non-pecuniary conditions of employment among their workers. Trade unions exist because an individual worker has very little power to influence decisions that are made about his or her job. By joining together with other workers, there is a better chance of having an influence and giving an opinion. The origin of trade unions can be traced back, at least, to the craft unions formed in the UK during the 19th century. From then union membership grew constantly almost everywhere, though at a different speed, until the 1970s-1980s. Afterwards, membership into trade unions dropped sharply more or less in every developed country, creating a potential gap between participation and representation workers want and the voice they get at their workplace. Statistical data, whose results will be later illustrated, show that the decline has been considerable. Nevertheless, it is difficult to predict if the decline is terminal or not. By analyzing the role trade unions play and the causes of their decline I will try to give my opinion in this debate. First of all, a premise is necessary: great divergence is part of the debate over trade unions. Unions face different organizational problems in different parts of the economy.
The rise of the Chinese economy over the past twenty years has been meteoric and its influence on the world economy has also increased during this time. Analyzing these changes through statistics and graphs is an interesting and beneficial exercise.
EC 1104 Unit 4.1 Aileen Murphy Richard Murphy - 110383255 - 24th March 2011 .1 China .2 I have chosen China, as it has recently become the worlds' second largest economy. The rise of the Chinese economy over the past twenty years has been meteoric and its influence on the world economy has also increased during this time. Analyzing these changes through statistics and graphs is an interesting and beneficial exercise. .3 China is the world's most populated country and in over the last thirty years its economy has grown by about 9.7% per annum.1 It has moved from being an underdeveloped and poor nation into an economic powerhouse, overtaking Japan as the world's second largest economy. Its current GDP is $4.9 trillion but its GNI per capita is only $3,650 trillion.2 The Chinese economy is driven largely b manufacturer and in 2010 the Asian Nation became the world's biggest energy consumer. 3 2.1 China's GDP in 2009 was $4.9 trillion. China's GNP was $9.17 trillion for the same year. 2.2 There is a significant difference between GDP and GNP, approximately $4.2 trillion. 2.3 Chinese GNP is greater than GDP, as it takes into account all profits generated by Chinese people and business abroad, whereas GDP only accounts for the value produced within Chinese borders. 3.1 Year Consumption (US$ Billions) 990 217 994 316 998 597 2002 866 2006 388 2009
An economic analysis of tesco
An economic analysis of Tesco Introduction The aim of this report is to analyse the economics of a firm in this case Tesco, which is one of the UK's leading retailer. In order to effectively analyse the company a particular Tesco store located in Hackney, close to Hackney central station has been chosen, the following will be discussed and analysed in relation to the store: * Demand * Supply and production * Costs * Competition * 3 major economic problems * Solution /strategy to problems Firms' background (Tesco) Tesco is the biggest retailer in Britain, where it employs more than 250,000. The third-largest retailer in the world, it made an underlying pre-tax profit of more than £2 billion ($3.5 billion) last year on sales of £37 billion. It is still growing at home, but is also expanding abroad, with investments in Poland, Thailand, South Korea, Ireland and Hungary Demand The store is located just opposite an underground station this has a major effect on the demand mainly because there are various types of consumers who come into the store * The main factor is price as the company targets consumers who are price sensitive and price elastic * Tesco sells different types of product, which includes branded products such as Heinz and coca-cola, while the unbranded products are Tesco branded products such as Tesco baked beans and Tesco cola. This means they
NOTES on the Corn Laws Debate.
NOTES on the Corn Laws Debate In 1814, Malthus launched himself into the Corn Laws debate then raging in parliament. After a first pamphlet, Observations, outlining the pros and cons of the proposed protectionist laws, Malthus tentatively supported the free traders, arguing that as cultivation as British corn was increasingly expensive to raise, it was best if Britain at least in part on cheaper foreign sources for its food supply. He changed his mind the next year, in his 1815 Grounds of an Opinion pamphlet, siding now with the protectionists. Foreign laws, he noted, often prohibit or raise taxes on the export of corn in lean times, which meant that the British food supply was captive to foreign politics. By encouraging domestic production, Malthus argued, the Corn Laws would guarantee British self-sufficiency in food. Observations on the Effects of the Corn Laws, and of a Rise or Fall in the Price of Corn on the Agriculture and General Wealth of the Country by the Rev. T.R. Malthus, Professor of Political Economy at the East India College, Hertfordshire London Printed for J. Johnson and Co., St. Paul's Church-Yard, 814 http://socserv2.socsci.mcmaster.ca/~econ/ugcm/3ll3/malthus/cornlaws "An Examination of Mr. Malthus's Doctrines" 1 http://www.blupete.com/Literature/Essays/Hazlitt/PolEssMalthus.htm The Princeton review. / Volume 39, Issue 1