Mouvements de la courbe WS

Movements of the WS Curve

• The WS curve, or wage-setting curve, represents the relationship between the real wage and the rate of employment.

• It shows the wage rate firms are willing to pay at different levels of employment.

• Several factors influence the position of the WS curve, including:

  • Productivity
  • Legal framework regulating work conditions, such as minimum wage laws
  • The bargaining power of unions
  • Labour market institutions
  • Expectations about wages
  • Perceived difficulty of hiring and firing workers
  • Demographic factors

• A shift in the WS curve will change the equilibrium levels of output and employment.

• Rightward (upward) shift: An increase in real wages and/or productivity might cause a rightward (upward) shift. This would mean firms are willing to pay higher wages at any given level of employment.

• Leftward (downward) shift: A decline in real wages and/or an increase in the unemployment rate might cause a leftward (downward) shift. This would mean that firms are only willing to pay lower wages at any given level of employment.

• Factors influencing a rightward shift:

  • Increased labour productivity.
  • Positive changes in labour market institutions. This might involve increased bargaining power for employees or an improvement in relations between employers and employees.
  • Improvements in labour quality.

• Factors influencing a leftward shift:

  • Reduced labour productivity.
  • Changes in the labour market such as greater difficulty hiring and firing staff.
  • Negative changes in labor market institutions

• The curve is not static; its position changes over time due to the dynamics of the factors mentioned above. These shifts can be influenced by short-term and long-term economic factors.

• Effect on the equilibrium real wage and employment:

  • A rightward shift leads to a higher equilibrium real wage and higher employment. 
  • A leftward shift leads to a lower equilibrium real wage and lower employment.

• Relationship with the PS curve: The WS curve interacts with the PS curve (price-setting curve) to determine the equilibrium real wage and employment level in the economy.  The intersection of these two curves determines the short-run equilibrium for the economy.

• Importance in macroeconomic analysis: The WS curve provides important insights into the relationship between real wages, employment, and inflation. Understanding its movement is crucial for macroeconomic policymakers aiming to maintain stable employment and price levels.

Cette évaluation explore les mouvements de la courbe WS, qui illustre la relation entre le salaire réel et le taux d'emploi. Comprenez les divers facteurs influençant cette courbe et les implications d'un déplacement vers la droite ou vers la gauche.