Profitability, investment, and efficiency wages (Q955435): Difference between revisions
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English | Profitability, investment, and efficiency wages |
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Profitability, investment, and efficiency wages (English)
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20 November 2008
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Summary: We examine a model that blends the neoclassical theory of investment with an intertemporal efficiency wage model with turnover costs. Investment decisions in capital are associated with the allocation of labor and the determination of efficiency wages. The model relates Tobin's \(q\) to efficiency wages and, in particular, to the Solow condition. It provides a general framework to analyze firm's intertemporal choices of capital, labor and efficiency wages.
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