DID A CAPITAL DEEPENING PARADOX AND SWITCHING POINTS OCCUR IN INDONESIA?
https://doi.org/10.22146/jieb.27649 Ardyanto Fitrady(1*)
(1) Universitas Gadjah Mada
(*) Corresponding Author
Abstract
This paper discusses the empirical results of wage-profit rate schedules between 2000 and 2008 in Indonesia using input-output analysis. Using a mathematical approach, this paper has four main conclusions. First, there is a decrease in both wage share and profit margin in Indonesia. The decrease may be caused by the increase in relative prices of other inputs such as raw materials that generate inefficiency. Second, there is no proof of reverse capital deepening during the observed period and there is an indication that the capital was getting cheaper relative to other inputs during the period. Third, the capital-labor ratio tends to increase over time. Fourth, there is no proof of switching point and reswitching in technology during the period. However, this paper only provides us with an empirical result during the observed period. It is always possible to have a switching point or reswitching in the economy over a longer period.
Keywords
Full Text:
PDFReferences
Bank Indonesia, 2017. Available at: http://www.bi.go.id/id/moneter/informasi-kurs/transaksi-bi/default.aspx, accessed on April 13,2017
BPS-Statistics Indonesia, 2107. Available at: https://www.bps.go.id/linkTabelStatis/view/id/981, accessed on January 2, 2017
Cohen, A. J., & Harcourt, G. C., 2003. "Retrospectives: whatever happened to the Cambridge capital theory controversies?". The Journal of Economic Perspectives, 17 (1), 199-214.
da Silva, E. A., 1987. "Wage-Profit Trade-Offs in Brazil: An Input/Output Analysis, 1970-1975". Science & Society (Guilford Press), 51 (3), 347-354.
Dhanani, Shafiq, and I. Islam, 2004. Indonesian Wage Structure and Trends, 1976-2000. International Labour Office, Geneva.
Dumenil, G., 1983. "Beyond the Transformation Riddle: A Labor Theory of Value". Science & Society (Guilford Press), 47 (4), 427-450.
Foley, D. K., and A. Marquetti, 1997 "Economic Growth from a Classical Perspective" Edited by J. Teixeira, Money, Growth, Distribution and Structural Change: Contemporaneous Analysis. Brasilia: University of Brasilia Press.
Foley, D. K., and T. R. Michl, 1999. Growth and Distribution. Cambridge, Massachusetts: Harvard University Press.
Han, Z., and B. Schefold, 2006. "An Empirical Investigation of Paradoxes (Reswitching and Reverse Capital Deepening) in Capital Theory". Cambridge Journal of Economics, 30 (5), 737-765.
Kurz, H. D., and N. Salvadori, 1995. Theory of Production: A Long Period Analysis. New York: Cambridge University Press.
Michl, T. R., 1988. "Why Is The Rate of Profit Still Falling?" Summer Research Workshop. The Jerome Levy Economics Insititute.
Miller, R. E., and P. D. Blair, 2009. Input-Output Analysis: Foundations and Extensions. 2nd ed. New York: Cambridge University Press.
Pasinetti, L.,1977. Lectures on the Theory of Production. New York: Columbia University Press.
Samuelson, P. A., 1962. "Parable and realism in capital theory: the surrogate production function". The Review of Economic Studies, 29(3), 193-206.
Scazzieri, R., "Reverse capital deepening." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 08 November 2016
Soklis, G., 2011. "Shape of Wage-Profit Curves in Joint Production Systems: Evidence from the Supply and Use Tables of the Finnish Economy". Metroeconomica (Blackwell Publisihing Pte Ltd), 1-13.
DOI: https://doi.org/10.22146/jieb.27649
Article Metrics
Abstract views : 2767
| 
views : 3064
Refbacks
- There are currently no refbacks.
Copyright (c) 2017 Journal of Indonesian Economy and Business
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
| Journal of Indonesian Economy and Business |
| The Journal of Indonesian Economy and Business (print ISSN 2085-8272; online ISSN 2338-5847) is published by the Faculty of Economics and Business Universitas Gadjah Mada, Indonesia. The content of this website is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License |
| © 2019 Journal of Indonesian Economy and Business | Visitor Statistics |