• Corpus ID: 1356885

Department of Economics Working Paper University of Massachusetts Amherst the Limits to Wage-led Growth in a Low-income Economy

@inproceedings{RazmiDepartmentOE,
  title={Department of Economics Working Paper University of Massachusetts Amherst the Limits to Wage-led Growth in a Low-income Economy},
  author={Arslan Razmi},
  url={https://api.semanticscholar.org/CorpusID:1356885}
}

• A. Razmi
• Economics

The limits to wage-led growth in a low-income economy Abstract Neo-Kaleckian literature has actively debated whether growth is wage-or pro…t-led in capitalist economies. However, existing studies tend to ignore the non-tradable sector and heterogeneity within the tradable sector. This paper shows that incorporating these features renders wage-led growth in an open developing economy unfeasible in the traditional (Kaleckian) sense of the term. This result –which follows even if one sets aside… 

The limits to wage-led growth in a low-income economy Abstract Neo-Kaleckian literature has actively debated whether growth is wage-or pro…t-led in capitalist economies. However, existing studies tend to ignore the non-tradable sector and heterogeneity within the tradable sector. This paper shows that incorporating these features renders wage-led growth in an open developing economy unfeasible in the traditional (Kaleckian) sense of the term. This result –which follows even if one sets aside the competitiveness considerations generally seen as impeding such growth – occurs due to the presence of a homogeneous goods-producing tradable sector that sets the ceiling to steady state growth. A corollary, in light of …ndings from the " new new trade theory " literature, is that increasing South-South trade may tend to narrow room for wage-led growth regardless of the other desirable e¤ects of higher wages.