Working Paper Number
203
Publication Date
2009
Abstract
In a seminal paper on Marxian business cycle theory Goodwin (1967) presented a model, which assumed that a higher wage share leads to lower investment and thus a general economic slowdown. In contrast Kalecki (1971) was arguing that a higher wage share would have an expansionary effect because the consumption propensity out of wage income is higher than that out of profit income. Based on a general model that allows for wage-led as well as profit-led demand regimes, this paper estimates the effects of a change in the wage share on aggregate private domestic demand with quarterly data for 12 OECD countries.
DOI
https://doi.org/10.7275/1284783
Comments
Working Paper 203