publication . Research . Other literature type . Article . 2017

Weaknesses of 'wage-led growth'

Peter Skott;
Open Access English
  • Published: 01 Jul 2017
  • Publisher: Amherst, MA: University of Massachusetts, Department of Economics
  • Country: Denmark
The emphasis in post-Keynesian macroeconomics on wage- versus profit- led growth may not have been helpful. The profit share is not an exogenous variable, and the correlations between the pro.t share and economic growth can be positive for some exogenous shocks but negative for others. The terminology, second, suggests a unidirectional causality from distribution to aggregate demand while in fact distribution can itself be directly affected by shifts in aggregate demand. The reduced form correlations, third, depend on interactions with the labor market, and a focus on the goods market can be misleading. If, fourth, empirical estimates are taken at face value, th...
free text keywords: E2, O41, investment, saving, income distribution, Lucas critique, Marglin-Bhaduri model, ddc:330, Face value, Causality, Economics, Aggregate demand, Monetary economics, Wage, media_common.quotation_subject, media_common, Inequality, Labour economics, Post-Keynesian economics
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