Is aggregate demand wage-led or profit-led? National and global effects

Ozlem Onaran and Giorgos Galanis

ILO Working Papers from International Labour Organization

Abstract: Estimates the effects of a change in the wage share on growth in the G20 countries using a post-Keynesian/post-Kaleckian model. Analyses the interanctions among different economies, and calculates the global multiplier effects of a simultaneous decline in the wage share. Suggests that at the national level, a decrease in the wage share leads to lower growth in the euro area, Germany, France, Italy, Uk, Us, Japan, Turkey, and Korea, i.e these economies are wage-led, whereas it stimulates growth in Canada, Australia, Argentina, Mexico, China, India, and South Africa, thus the latter group of countries are profit-led.

Keywords: wages; wage differential.; economic growth; national level; measurement.; salaire; disparité des salaires; croissance économique; niveau national; mesure; salario; diferencia del salario; crecimiento económico; nivel nacional; medición (search for similar items in EconPapers)
Pages: 65 pages
Date: 2012
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Citations: View citations in EconPapers (92)

Published in Conditions of work and employment series

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Working Paper: Is aggregate demand wage-led or profit-led? National and global effects (2012)
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