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Cointegration Tests of the Profit-maximising Equilibrium in Greek Manufacturing 1958-1991

Fountas, Stilianos
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Publication Date
1997-05
Keywords
Economics, Profit maximising equilibrium, Error-correction model
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Working Paper
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Fountas, S. (1997) "Cointegration Tests of the Profit-maximising Equilibrium in Greek Manufacturing 1958-1991" (Working Paper No. 014) Department of Economics, National University of Ireland, Galway.
Abstract
This paper applies the recently developed cointegration techniques to test for a long-run equilibrium among real wages and the average productivity of labour as implied by profit maximisation in the Greek manufacturing sector. We find evidence for a profit-maximising equilibrium and for adjustment towards this long-run equilibrium through nominal wages and labour productivity. We have also provided an estimate of the elasticity of substitution of 0.23 which is consistent with that of other studies using alternative approaches.
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National University of Ireland, Galway
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Attribution-NonCommercial-NoDerivs 3.0 Ireland
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Economics (Working Papers)