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Is Aggregate Demand Wage-led or Profit-led? A Global Model

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Wage-led Growth

Part of the book series: Advances in Labour Studies ((AILS))

Abstract

There has been a significant decline in the wage share in both the developed and developing world which has coincided with the introduction of neoliberal policy reforms since the 1980s. The promise of these reforms was to stimulate private investment and exports, which was expected in turn to generate higher growth, more jobs and trickledown effects. The reasons for this fall have recently been the subject of a growing amount of literature that has tried to pin down the effects of technology, globalization, and changes in labour market institutions (see, inter alia, IMF, 2007; OECD, 2007; EC, 2007; ILO/IILS, 2011; Rodrik, 1997; Diwan, 2001; Harrison, 2002; Onaran, 2009; Rodriguez and Jayadev, 2010; Stockhammer, 2011). This chapter offers a theoretical and empirical assessment of the effects of this pro-capital redistribution of income on growth at both national and global levels.

We are grateful to Engelbert Stockhammer, Servaas Storm, Amitava Dutt, Sangheon Lee, Patrick Belser and Marc Lavoie for helpful comments on earlier stages of the research, to Susan Pashkoff for careful language editing, and to Matthieu Charpe, Ricardo Molero Simarro, Uma Rani Amara, Rayaproulu Nagaraj, Juan Grana, Jo ana Chapa, Araceli Ortega Diaz, Morne Oosthuizen, Claudio Roberto Amitrano, Kazutoshi Chatani and Byung-Hee Lee for their valuable support regarding data. All remaining errors are ours.

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Author information

Authors and Affiliations

  1. University of Greenwich, UK

    Özlem Onaran (Professor of Workforce and Economic Development Policy)

  2. University of Warwick, UK

    Giorgos Galanis (doctoral candidate in Economics)

Authors
  1. Özlem Onaran
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  2. Giorgos Galanis
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Editor information

Editors and Affiliations

  1. Department of Economics, University of Ottawa, Canada

    Marc Lavoie (Professor) (Professor)

  2. Kingston University, UK

    Engelbert Stockhammer (Professor of Economics) (Professor of Economics)

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© 2013 International Labour Organization

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Onaran, Ö., Galanis, G. (2013). Is Aggregate Demand Wage-led or Profit-led? A Global Model. In: Lavoie, M., Stockhammer, E. (eds) Wage-led Growth. Advances in Labour Studies. Palgrave Macmillan, London. https://doi.org/10.1057/9781137357939_4

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