Wage‐led versus profit‐led demand: a comprehensive empirical analysis
Oyvat, Cem ORCID: 0000-0002-5097-0246, Öztunalı, Oğuz and Elgin, Ceyhun
(2020)
Wage‐led versus profit‐led demand: a comprehensive empirical analysis.
Metroeconomica, 71 (3).
pp. 458-486.
ISSN 0026-1386 (Print), 1467-999X (Online)
(doi:https://doi.org/10.1111/meca.12284)
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Abstract
This study investigates various economic factors’ impact in determining the relationship between functional income distribution and aggregate demand from both a theoretical and an empirical viewpoint. We base our analysis on a demand‐driven growth model for an open economy that allows for either profit‐led or wage‐led regimes. Our results strongly indicate that a higher level of trade openness is associated with a lower probability of being wage‐led. We find evidence that lower wage inequality makes an economy more wage‐led and that countries with a greater private credit‐to‐gross domestic product (GDP) ratio are more likely to be profit‐led.
Item Type: | Article |
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Uncontrolled Keywords: | demand, distribution, economic growth, Keynesian economics, trade openness |
Subjects: | H Social Sciences > H Social Sciences (General) |
Faculty / Department / Research Group: | Faculty of Business Faculty of Business > Department of International Business & Economics Faculty of Business > Institute of Political Economy, Governance, Finance and Accountability (IPEGFA) Faculty of Business > Institute of Political Economy, Governance, Finance and Accountability (IPEGFA) > Greenwich Political Economy Research Centre (GPERC) |
Last Modified: | 01 Jul 2020 10:29 |
Selected for GREAT 2016: | None |
Selected for GREAT 2017: | None |
Selected for GREAT 2018: | None |
Selected for GREAT 2019: | None |
Selected for REF2021: | REF 3 |
URI: | http://gala.gre.ac.uk/id/eprint/27870 |
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