The political economy of income distribution

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Chapter 2 in Income Distribution, Growth and Unemployment, 2022, pp 25-35 from Edward Elgar Publishing

Abstract: The income distribution curve, i.e. the relation between income distribution and some indicators of economic activity, being either unemployment or the rate of growth, has been presented in the literature under two opposite labels: labour-market led (LML) versus the goods-market led (GML). The former case is represented by the classical labour marker working, based originally on the concept of reserve army. According to this vision, there is a negative association between the wage share and the rate of unemployment. In the opposite conception, the rate of growth is favourable to profits and this is very close to the so called new-Keynesian view. These two hypotheses can be detected by means of two methodological approaches, one macro and the other structural. The latter identified each component of income distribution, i.e. wages, price and productivity. In this case, the political economy nature of the topic becomes more marked, while the possibility of introducing a wage-price spiral into the analysis allows to broaden the income distribution debate (IDD).

Keywords: Economics and Finance; Politics and Public Policy (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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