ECON-2096EL Study Guide - Midterm Guide: Epicenter, Zaibatsu, Honshu
26 Mar 2017
School
Department
Course
Professor
Document Summary
In the space provided below, explain how the lazear model can be used to show how four features of employment in large japanese firms can be said to fit together. Area a (left side) is the investment of the worker. Area b (right side) is the return from the earlier investment. The worker is paid below productivity on the left side above productivity later on. Unions and the firm negotiate the mandatory retirement age to make all better off. Unions also used to hold employment once employee becomes less productive. Steep age wage profile provides incentive for employee to work. In the space provided below, explain how alan blinder argued how japanese firms following strategy of sales maximization subject to a profit constraint could survive in the same industries as firms following a strategy of pure profit maximization. Write your answer in complete sentences organized into short paragraphs. Use a diagram to illustrate your answer and label it with care.
