The Dilemma of Factor Allocation and Wage Difference under the Constant Region-Wide Returns to Scale | Zendy

Xi Xi | Zendy; Yuanyuan Gong | Zendy; Runze Yuan | Zendy

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The Dilemma of Factor Allocation and Wage Difference under the Constant Region-Wide Returns to Scale

Author(s) -

Xi Xi,

Yuanyuan Gong,

Runze Yuan

Publication year - 2021

Publication title -

discrete dynamics in nature and society

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.264

H-Index - 39

eISSN - 1607-887X

pISSN - 1026-0226

DOI - 10.1155/2021/4283170

Subject(s) - economics , returns to scale , wage , constant (computer programming) , contradiction , production (economics) , scale (ratio) , capital (architecture) , dilemma , order (exchange) , econometrics , microeconomics , labour economics , mathematics , computer science , physics , philosophy , geometry , archaeology , epistemology , finance , quantum mechanics , history , programming language

In the model setting of multiregional macroeconomic research, the constant return on scale of all production functions and the free flow of all production factors cannot be combined. Otherwise, the potential theoretical conflict, that is, the problem of contradiction equations, may arise. If there is a unified capital interest rate in the market and the return on scale of production in all regions remains unchanged, it is necessary to set restrictions on the flow of labor force in order to realize the differential wages among regions. When the interest rate is not too high, the regional wage increases with the larger output capital elasticity.

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