Profitability, investment, and efficiency wages

descriptionPublicationkeyboard_double_arrow_right Article 01 Jan 2005 English Publisher:Informa UK LimitedJournal:Journal of Applied Mathematics and Decision Sciences, volume 2,005, pages 201-211 (issn: 1173-9126, eissn: 1532-7612,

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Authors: João Ricardo Faria;

doi: 10.1155/jamds.2005.201

Profitability, investment, and efficiency wages

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Abstract

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.

Related Organizations

University of Texas–Pan American
United States
The University of Texas System
United States
University of the West
United States

Keywords

Economic growth models, Finance etc., Applications of optimal control and differential games

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