 Bhaduri–Marglin meet Kaldor–Marx: wages, productivity and investmentServaas Storm and
C.W.M. Naastepad
Review of Keynesian Economics, 2017, vol. 5, issue 1, 4-24 Abstract: Higher real wages provide macroeconomic benefits in terms of increased demand if the economy is wage-led (as in most European economies) and of higher labour productivity growth and more rapid technological progress. Taking these benefits into account, we show that a wage-led economy becomes less strongly wage-led. The impact of higher real wage growth on employment growth becomes ambiguous. But for model parameter values which are realistic for the wage-led eurozone, higher real wages reduce employment growth. Contrariwise, real wage restraint in a weakly wage-led economy generates jobs – as recent European experience underscores. This internal contradiction in wage-led economies can be overcome if a high wage regime is complemented by supportive fiscal and monetary policies. Keywords: wage-led growth; distribution; employment (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:elg:rokejn:v:5:y:2017:i:1:p4-24 Access Statistics for this article Review of Keynesian Economics is currently edited by Thomas Palley, MatÃas Vernengo and Esteban Pérez Caldentey More articles in Review of Keynesian Economics from Edward Elgar Publishing |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.