Income distribution, growth, and conflict: the aggregate demand nexus.
Onaran, Ozlem and Stockhammer, Engelbert (2008) Income distribution, growth, and conflict: the aggregate demand nexus. O D T U Gelisme Dergisi [METU Studies in Development], 35 (1). pp. 209-224. ISSN 1010-9935
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This paper is a literature review on the recent Post-Keynesian empirical findings about the effect of income distribution on investment and growth in a variety of different countries and aims at discussing the policy implications of this literature. The core question is the following: Are actual economies wage-led or profit-led? Current orthodoxy implicitly assumes that they are profit-led, and thus supports the neoliberal policy agenda. The merit of the Post-Keynesian/Kaleckian models is that they highlight the dual function of wages as a component of aggregate demand as well as a cost item. If an economy is not profit-led, then there is room for policies targeting growth and income distribution simultaneously. However, the economies are indeed dynamic in the sense that beyond a point an economy can shift from a wage-led to a profit-led regime, with an intensified distributional conflict.
|Research Areas:||Business School > Economics and International Development|
|Deposited On:||04 Mar 2010 12:16|
|Last Modified:||06 Feb 2013 10:57|
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