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Factor price
About: Factor price is a research topic. Over the lifetime, 2764 publications have been published within this topic receiving 86176 citations.
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TL;DR: In this article, the authors model technological change as endogenous in the sense that it is affected by economic, behavioral, and institutional variables, such as relative input prices and their level, of which the price of labor is particularly important.
Abstract: Technological change is modeled as endogenous in the sense that it is affected by economic, behavioral, and institutional variables. Technological change is especially affected by changes in relative input prices and their level, of which the price of labor is particularly important. Input prices are affected by institutional variables. Such prices also impact on the firm's efficiency, which in turn affects growth rates as well as the rate of technical change. As relative factor prices or their level increase, firms are induced to innovate or adopt extant technology to remain competitive or to maintain current profit rates. High wage firms can be expected to engage in such induced technological change, leading the growth process thereby yielding lower unit costs and increasing the level of material welfare. Relatively low wage economies can be locked into a state of economic inefficiency and laggard technological progress, especially in the long run.
21 citations
TL;DR: In this article, the authors consider a search market model where agents have heterogeneous beliefs about the distribution of prices and show that a price ceiling above marginal cost can reduce price dispersion and improve welfare.
Abstract: We consider a search market model where agents have heterogeneous beliefs about the distribution of prices. A suggestive example shows that Jevon's Law of One Price and standard welfare results are not robust to small heterogeneous errors in beliefs. In particular we show that a price ceiling above marginal cost can reduce price dispersion and improve welfare (by lowering aggregate search costs) without decreasing quantity supplied. These results are broadly consistent with the empirical evidence.
21 citations
TL;DR: In this article, the authors analyse micro-level consumer price data in Luxembourg with a particular view on price change reversals and wage indexation and find that on an average, price decreases are as large as price increases.
Abstract: We analyse micro-level consumer price data in Luxembourg with a particular view on price change reversals and wage indexation. The median duration is roughly 8 months. On an average, price decreases are as large as price increases. With the exception of services, individual prices do not show signs of downward rigidity. Excluding price change reversals reduces the weighted frequency of price change from 17 to 12%. Accumulated price and wage inflation, automatic wage indexation, and the cash changeover increase the probability of a price change, whereas pricing at attractive pricing points and price regulation have the opposite effect. Copyright © 2010 John Wiley & Sons, Ltd.
21 citations
TL;DR: The authors found that factor price changes account for little of the growth in output per man-hour in nineteenth-century cotton weaving, and that most of the labor saving bias arose from improved labor quality.
Abstract: How much of the rapid growth in output per man-hour in nineteenth-century cotton weaving arose from technical change and how much arose from price-driven substitution of capital for labor? Using an engineering production function, I find that factor price changes account for little of the growth in output per man-hour. However, much of the growth and most of the apparent labor-saving bias arose not from inventions, but from improved labor quality—better workers spent less time monitoring the looms. Labor quality played a critical role in the persistent association between economic growth and capital deepening in this important sector.
20 citations
TL;DR: The authors analyzed the major causes of food price inflation in 1973 and found that domestic monetary policy, government acreage restrictions, the Soviet grain deal, world economic conditions, devaluation of the dollar, and price freeze II.
Abstract: This study analyzes the major causes of the food price inflation of 1973. In the approximate order of their importance, those causes were found to be domestic monetary policy, government acreage restrictions, the Soviet grain deal, world economic conditions, devaluation of the dollar, and price freeze II. Econometric models of the livestock and feed grains and meal economies were used to decompose the price increase into the various causes given above. The study also details and analyzes events and policy actions taken during the 1971–74 period.
20 citations