Journal Article Brief Comments Get access Robert M. Solow Robert M. Solow Massachusetts Institute of Technology Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 89, Issue 1, February 1975, Pages 48–52, https://doi.org/10.2307/1881709 Published: 01 February 1975

I. Introduction, 65. — II. A model of long-run growth, 66. — III. Possible growth patterns, 68. — IV. Examples, 73. — V. Behavior of interest and wage rates, 78. — VI. Extensions, 85. — VII. Qualifications, 91.

I. Introduction and review, 537. — II. Many-goods model, 539. — III. Euler necessary conditions, 541. — IV. Case of satiated production, 544. — V. Physical analogy of small vibrations, 547. — VI. Case of utility satiation, 549. — VII. Practical computation, 553. — VIII. Hamiltonian formulation, 554. — IX. Pay-off in terms of initial state, 559. — X. Conclusion, 561.

This paper analyzes the impact of business cycle fluctuations on a labor market segmented into a unionized primary sector and a “competitive” secondary sector. Either permanent or temporary changes in real aggregate demand are shown to widen the intersectoral wage differential in recession and, under reasonable specifications of key parameters, to cause greater fluctuations of primary-sector employment than secondary-sector employment. This pattern agrees with the stylized facts of the U. S. economy.

I. Introduction, 537.--II. Building blocks, 539.--III. The working of the model, 545.--IV. Displacement of short-run equilibrium, 554.--V. Effective demand and the distribution of income, 557.--VI. Next steps, 559.