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Flexibility refers not just to a capacity to change, but to a capacity to change within a larger system or structure which itself remains unchanged. The outcome mixes adaptation and stability: some limited adaptation does occur, but the containing system or object stays intact.
Markets are reputed to be more flexible than other economic arrangements, though the meaning of flexibility remains vague. For orthodox economists, it has a narrow interpretation based on relative price movements within equilibrating markets, leading to allocative efficiency.
characteristics of the economic order which we would like to capture: its flexibility, its capacity for dynamic growth, and its continuity. I read the bulk of the background paper
Real wage inflexibility . Wages above the market equilibrium may cause unemployment. Classical economists argue that by letting wages fall to the equilibrium level, there would be no unemployment. In the diagram, the point at ‘minimum price’ reflects the NMW. This causes unemployment of Q1 – Q3. www.pmt.education
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dynamic economic and political development of capitalism, analyzed economics in class terms, and advocated the labour theory of value.
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In this paper, we estimate the degree of flexibility of global supply chains using data for 59 advanced, emerging and developing economies over a period of 21 years.
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Summary: I develop a wage setting theory starting with an imaginary flexible wage competitive economy with incomplete insurance markets hence both workers and firms are exposed to aggregate risks against which they cannot insure.
