Driver, Ciaran and Muñoz-Bugarin, Jair (2010) 'Capital Investment and Unemployment in Europe: Neutrality or Not?' Journal of Macroeconomics, 32 (1). pp. 492-496.
Productivity variables are often said to have no effect on the NAIRU under wage bargaining as the labour share is unaffected when production is characterised by a unit elasticity of substitution. While production functions such as the CES can explain a negative relationship between investment and equilibrium unemployment, the implication then is that the labour share should increase with investment. In this paper we show that for a long sample in the UK, the labour share has decreased with capital investment. For a panel of European countries for which estimation is possible, the same result is obtained.
|Item Type:||Journal Articles|
|SOAS Departments & Centres:||Faculty of Law and Social Sciences > School of Finance and Management|
|DOI (Digital Object Identifier):||10.1016/j.jmacro.2009.03.003|
|Depositing User:||Mutsa Marau|
|Date Deposited:||22 Oct 2010 10:24|
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