『最低賃金引上げは最大の成長戦略だ』（富士通総研） via this site. As PK showed in my previous post, given totally inelastic AD curve, the left-ward shift of AS curve does not change Y, and would probably push up inflation expectation that Japan desperately needs. Across-the-board minimum wage increase might pull the plug. However, there are a few important caveats. First, this is a genuinely macroeconomic argument. So, some microeconomic scrutiny is in need. Casually speaking, temporary workers would hurt in initial phase before inflation expectation builds up. Given the elastic Ld curve, the total wage revenue might decline and offset the distributional effect. Second, macroeconomic argument relies on vertical AD curve, which implies AD does not change in this period. Third, there is a risk that the incipient inflation expectation will be killed by none other than Central Bank. So, some accord is necesarry. Last, real wage won't change much in the end, because inflation expectation offsets nominal wage increase. Labor activist will be disappointed. In conclusion, this is rather like an income policy.
- Glen Weyl: Price Theory and Market Design Fall 2013(2015.12.19)
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