supply elasticity

And as a result, long run elasticities alright, are always greater than short run supply elasticities.

Define next the short-run simultaneous and lagged inverse supply elasticities respectively as:

Irwin looked at historical data to estimate import demand elasticities, and export supply elasticities for the United States in the years before 1888.

How much of the tax is ultimately borne by firms and how much by workers?(c) For any given supply elasticity show that firms bear more of the tax the more inelastic is the demand for labour.

This study was criticized by many economists, including Harvard Economics Professor Greg Mankiw, who pointed out that the CBO used a very low value for the earnings-weighted compensated labor supply elasticity of 0.14.

It follows that, as the long-run (direct) supply elasticity of labour tends to be much higher than the short-run one, this very simple dynamic model predicts an exploitation rate which is much smaller than the one produced by static analysis.

In his book The Intellectual and the Marketplace, for instance, he proposed Stigler's Law of Demand and Supply Elasticities, that "all demand curves are inelastic and all supply curves are inelastic too."

The exploitation rate is thus a weighted average of the short- and long-run inverse supply elasticities, where the weight of the long-run one is much bigger, because is much smaller than unity even when the discounting period is one year.