publication . Article . Research . Other literature type . 2017

Weaknesses of ‘wage-led growth’*

Peter Skott;
Open Access
  • Published: 01 Jul 2017 Journal: Review of Keynesian Economics, volume 5, pages 336-359 (issn: 2049-5331, eissn: 2049-5323, Copyright policy)
  • Publisher: Edward Elgar Publishing
  • Country: Denmark
Abstract
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...
Subjects
free text keywords: E2, O41, investment, saving, Marglin-Bhaduri model, Income distribution, Lucas critique, Face value, Causality, Economics, Aggregate demand, Monetary economics, Wage, media_common.quotation_subject, media_common, Inequality, Labour economics, Post-Keynesian economics, ddc:330
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