The impact of the functional distribution of income on gross domestic product: Colombia, 1970-2011
Osmar Loaiza Quintero,
Alexander Tobon () and
Guillermo David Hincapié Vélez ()
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Guillermo David Hincapié Vélez: Universidad Pontificia Bolivariana
Lecturas de Economía, 2017, issue 86, 63-104
The aim of this paper is to analyze the impact of the functional distribution of income (wages and profits) on Colombia’s gross domestic product (GDP) for the period between 1970 and 2011. For this purpose, the postkeynesian model of Bhaduri and Marglin (1990) provides the backbone of our theoretical approach, as this model allows analyzing the conditions under which the growth of an economy is guided by workers’ wages or capitalists’ profits. To determine Colombia’s growth regime a vector auto-regression (VAR) model is estimated, as well as simulations of how the GDP reacts to changes in the wage share. The results show that Colombia’s growth regime is led by wages.
Keywords: wages; functional distribution of income; aggregate demand; aggregate supply (search for similar items in EconPapers)
JEL-codes: E12 E25 E27 (search for similar items in EconPapers)
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