Wage-led Growth: Concept, Theories and Policies

Lavoie, Marc; Stockhammer, Engelbert

doi:10.1057/9781137357939_2

Cited by 158 publications

(90 citation statements)

References 28 publications

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“…At a more conceptual level, Lavoie and Stockhammer (2012) suggest that the polarization in income distribution and the fall of the share of wages in GDP play an important role in generating unbalanced and unequally distributed economic growth. Along similar lines, various authors in the International Journal of Labour Research (ILO, 2011) make the argument for sustainable wage-led growth policies.…”

Section: Empirical Researchmentioning

confidence: 99%

Factor income distribution and growth regimes in Latin America, 1950–2012

Tosoni

2016

International Labour Review

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Section: Empirical Researchmentioning

confidence: 99%

Factor income distribution and growth regimes in Latin America, 1950–2012

Tosoni

2016

International Labour Review

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“…If the net effect of a rise in the wage share is positive, i.e. if the consumption effect outweighs the investment (and net export effect), the demand regime is called wage led, if it is negative it is called profit led (Lavoie and Stockhammer 2013). 1 We argue that PKE can provide important insights in the nature and dynamics of neoliberalism and, in particular, the articulation of crisis of the Euro area.…”

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confidence: 97%

Neoliberal growth models, monetary union and the Euro crisis. A post-Keynesian perspective

Stockhammer

2016

New Political Economy

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Abstract. The paper offers an account of the Euro crisis based on post-Keynesian monetary theory and its typology of demand regimes. Neoliberalism has transformed social and financial relations in Europe but it has not given rise to a sustained profit-led growth process.Instead, growth has relied either on financial bubbles and rising household debt ('debt-driven growth') or on net exports ('export-driven growth'). In Europe the financial crisis has been amplified by an economic policy architecture (the Stability and Growth Pact) that aimed at restricting the role of fiscal policy and monetary policy. This neoliberal economic policy regime in conjunction with the separation of monetary and fiscal spheres has turned the financial crisis of 2007 into a sovereign debt crisis in southern Europe.

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“…See, Dubois & Michaux (2011). 26 Similar results favorable to a wage-led interpretation of the data have been found by Stockhammer et al (2009) for European economies and by Lavoie & Stockhammer (2012) for European countries plus Japan, and the United States. Onaran & Galanis (2012) find wage-led result to be consistent with a broader sample of countries.…”

Section: Real Wage Gdp and Debt-led Growth: An Empirical Analysismentioning

confidence: 52%

Wage and Profit-Led Growth: The Limits to Neo-Kaleckian Models and a Kaldorian Proposal

Caldentey

Vernengo

2013

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Bucknell UniversitySeptember 2013 * The opinions here expressed are the authors' own and may not coincide with those of the institutions with which they are affiliated. A preliminary version of this paper was presented at the Eastern Economic Association Meetings in New York, May 9, 2013. We thank the participants for their comments.The Levy Economics Institute Working Paper Collection presents research in progress by Levy Institute scholars and conference participants. The purpose of the series is to disseminate ideas to and elicit comments from academics and professionals.Levy Economics Institute of Bard College, founded in 1986, is a nonprofit, nonpartisan, independently funded research organization devoted to public service. Through scholarship and economic research it generates viable, effective public policy responses to important economic problems that profoundly affect the quality of life in the United States and abroad. ABSTRACTWe argue that a fundamental difference between Post-Keynesian approaches to economic growth lies in their treatment of investment. Kaleckian-Robinsonian models postulate an investment function dependent on the accelerator and profitability. Some of these models rely on the importance of profitability, captured by the profit share, to make the case for profit-led growth. For their part, Kaldorian models place the emphasis on the accelerator. More important, investment is a derived demand; that is, it is ruled by the adjustment of capacity to exogenous demand, which, in turn, determines the normal level of capacity utilization.In our view, the Kaldorian approach is better equipped to deal with some of the issues relating income distribution to accumulation with effective demand in the long run. We develop a Kaldorian open-economy model to examine the conditions under which an increase in real wages can produce profit or wage-led growth, showing that the limit to a wage-led expansion is a binding external constraint. The role and limitations of wages as a determinant of growth are further examined through spectral techniques and cycle analysis for a subset of developed economies. The evidence indicates that real wages are positively related to growth, investment, and capacity utilization. It also highlights the role of finance in sustaining expansions, suggesting that debt-led growth should not be identified with profit-led growth.

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Wage-led Growth: Concept, Theories and Policies

Cited by 158 publications

References 28 publications

Factor income distribution and growth regimes in Latin America, 1950–2012

Factor income distribution and growth regimes in Latin America, 1950–2012

Neoliberal growth models, monetary union and the Euro crisis. A post-Keynesian perspective

Wage and Profit-Led Growth: The Limits to Neo-Kaleckian Models and a Kaldorian Proposal

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