Lotus Eating Macro

From Marginal Revolution:

The question was what happens in macroeconomies as consumption approaches satiation.  Here\’s Bryan Caplan\’s answer:

…as consumption approaches satiation, workers reduce their hours of work to prevent themselves from actually reaching satiation.  More technically, as workers approach satiation, their labor supply curves start to "bend backwards."  The result is that rising labor demand stemming from rising productivity raises wages yet reduces employment.

A longer statement of the question is here and I believe it is fair to assume people still are not satiated in leisure and thus they will work less.

Well, yes. Of course really.

Perhaps you don´t need to get very close to satiation and perhaps this isn´t in fact an odd situation.

For that is what people actually do right now.

And this is what people have been doing for the past couple of centuries.

Leisure hours have been rising for decade upon decade. Yes, women´s working hours in hte cash economy have been rising but their unpaid working hours in hte home have been falling. And men´s working hours, whether paid or unpaid, have been falling, leaving both sexes with, on nett, more leisure.

And we don´t really think of the average joe or joette out there as being satiated as yet.  So what Bran is in fact saying is that people will continue in future to be pretty much as they are now.

I know, predictions real difficult, especially about the future, ain´t it?

2 comments on “Lotus Eating Macro

  1. People will be even keener on leisure as those managerialists whom old Dillowbert loathes so much make the workplace less and less agreeable.

  2. As consumption approaches satiation, the Public Sector think of ever more imaginative excuses for sticking their thieving hands in your pocket.

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