quinta-feira, 6 de junho de 2013

A question to Alex Schwartsman

Hi, Alex, bro. Howdy?

I read your piece and have got a question for you.

You show productivity growth has been weak in industry, weaker than in services. Maybe this is because the industry demands more complex investments than the services sector. And complex investments depend a lot on good institutions and stable rules (which are soringly lacking), whereas service sector investments are less complex. This is what my other bro, Samuca, is saying (Acemoglu, which is not my bro because he is 100 times more intelligent and skilled than me told sort of the same story to explain the reverse of fortunes in the 1800s).

Right. But if productivity has been performing badly in industry, why the heck wages went up more than in services?? Tight labor mkts alone cannot account for that; it explains rising overall wages. You have to couple this with sth else...more organized labor? But does this explain wage growth differentials (instead of levels)?



13 comentários:

  1. Hey, Samuca just called me.
    He proposed an ingenious labor supply answer (which I liked). He said working at industry is fucking boring when compared to tending clients at a bar in Copacabana. So people demand higher wages to remain hammering pins. This is of course a level effect; but he suggested it should be interacted with current labor market conditions.
    Tks, dude.

  2. Acemoglu looks like Marcos Rangel.

    1. Pensei a mesma coisa assim que abri o blog nesta manhã.

    2. Marcos Rangel and Acemoglu may be the same person...

    3. X, you look like cesg.
      Cesg looks like Renato Russo.
      So X, you look like Renato Russo.

  3. The story I have been telling is the following.

    "Once upon a time, there was substantial slack in the labor market.

    If marginal productivity were lower in the industrial sector, manufacture producer would pay less than workers would get in the services sector, and the Lord saw that this was fine.

    Lo and behold: whereas it is true that there are better wages elsewhere, thou(o worker in the manufacturing sector!) are not going to get it, for I say there are no jobs there.

    But time passes and the labor market tightens. And people no longer cared for the Lord, because now there are jobs that pay better in the service sector, thus, in order to maintain the sinners in their industrial jobs, manufacturers have to increase wages, narrowing the gap.

    And the Lord said: the closer we get to full employment, the lower the wage gap will be. And so it was. And everybody feasted on carps, ourangutans and breakfast cereals

    (Meticulus 24:24) (the feast part comes from Month Python)"

    Does it make sense to you?

  4. Jesus, bro, I will buy myself a bible (I studied the greeks since we last met at BH)

    Your Lord is sort of discredited, right? Trumped by economic forces and sinners!

    Right, so basically you re saying that to retain labor in the face of higher paying Jobs in services (because of higher productivity), industry had to follow the trend and this became even more important as labor mkt tightened. Ok, makes sense to me. Just to complement your story: higher marginal costs means the least productive firms are kicked out and those remaining cut production to equate marginal revenues to marginal costs.

  5. Giovanotto, a young economist at USP called me to say this: he suggested that maybe total productivity in industry may stem from a combination of low capital productivity with a not so low labor productivity. When computing Y/L things get messed up together.

  6. X Economist, maybe Giovanotto have reason

    Think about marginal productivity of one factor of production, he is strongly related with Interest.

    Interest of Physic Stock is defined by BNDES long-term rate. Interest of Human Stock is defined by short-term rate of private credit.

    Ass: Unesp Student

    Well well, two interest rates will allow two very different marginal productivity of Factors Stocks without convergence forces to equal both.

    In sectors when Physic Stocks are very intense, the productivity will progress lower than sectors when Humans Capital Stocks are very intense.

  7. essa história de post em inglês tá muio desagradável.