Determinants of the Wage Share: A Panel Analysis of Advanced and Developing Economies

Stockhammer, Engelbert

doi:10.1111/bjir.12165

Cited by 191 publications

(213 citation statements)

References 56 publications

(56 reference statements)

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“…Jayadev (2007) and Stockhammer (2016) provide econometric evidence that financial globalisation has had negative impact on the wage share in panel analyses that include advanced economies as well as EMEs. Second, post-Keynesians have developed a typology of demand regimes that includes wage-led as well as profit-led regimes (Bhaduri & Marglin, 1990), which has been extended to include debt-driven and export-driven growth models (Lavoie & Stockhammer, 2013).…”

Section: Financialisation In Emerging Economies: a Literature Reviewmentioning

confidence: 99%

Financialisation in emerging economies: a systematic overview and comparison with Anglo-Saxon economies

Karwowski

Stockhammer

2017

Economic and Political Studies

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126

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Financialisation research has originally focussed on the US experience, but the concept is now increasingly applied to emerging economies (EMEs). There is a rich literature stressing peculiarities of individual country experiences, but little systematic comparison across EMEs. This paper fills this gap, providing an overview of the debate and identifying six financialisation interpretations for EMEs. These different interpretations stress (1) financial deregulation (2) foreign financial inflows, (3) asset price volatility, (4) the shift from bankbased to market-based finance, (5) business debt, and (6) household indebtedness. We construct and compare measures of the six financialisation interpretations across a sample of 17 EMEs from Latin America, emerging Europe, Africa and Asia, contrasting them with the US and UK, two financialised economies. We find considerable variation in financialisation experiences of EMEs. Asset price volatility is found across continents. Asia has been more exposed to capital inflows, stock markets have gained importance and private sector debt risen. In emerging Europe financial deregulation has been more pronounced with lower levels but strong increases in household debt. The picture is similar in South Africa, the African EME in the sample, where household debt is comparatively high. Financialisation in Latin America is weaker according to our measures.Keywords: Financialisation; Emerging markets; Financial instability; Asset price volatility; Heterodox economics JEL codes: F30; F34; G01; G12; G15; B50 Acknowledgements: We would like to thank our colleague Rex McKenzie for comments on the paper. The usual disclaimers apply.

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Section: Financialisation In Emerging Economies: a Literature Reviewmentioning

confidence: 99%

Financialisation in emerging economies: a systematic overview and comparison with Anglo-Saxon economies

Karwowski

Stockhammer

2017

Economic and Political Studies

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126

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“…Similarly, contradicting the globalization thesis, developing and emerging countries have been experiencing worse decline in the labor share of income since the 1990s than in advanced countries (International Institute for Labor, 2011). Owing to these drawbacks some scholars have turned to financialization to explain increased inequality that resulted from the decline in labour's share of income (Chen & Chen, 2012;Dünhaupt, 2012Dünhaupt, , 2016Hein, 2015;Lin & Tomaskovic-Devey, 2013;Stockhammer, 2009Stockhammer, , 2017Van Arnum & Naples, 2013). One important manifestation of financialization is that profits are increasingly accumulated by means of finance that include dividends, capital gains, and interests, rather than trade, producing commodities, or nonfinancial services.…”

Section: Possible Explanations For Changing Income Inequalitymentioning

confidence: 99%

“…One important manifestation of financialization is that profits are increasingly accumulated by means of finance that include dividends, capital gains, and interests, rather than trade, producing commodities, or nonfinancial services. Therefore, financialization is often measured using increased share in GDP of the financial sector, increased emphasis on current shareholder returns, and rising household debt (Stockhammer, 2017).…”

Section: Possible Explanations For Changing Income Inequalitymentioning

confidence: 99%

Determinant of income inequality in Indonesia

Afandi

Rantung

Marashdeh

2017

Econ. J. Emerg. Mark.

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This study examines whether changing economic structure, social conditions, and financialization are responsible for increased income inequality in Indonesia. By employing panel data of 32 provinces in Indonesia that spans from 2007 to 2013, it finds that structural change affects income inequality, increased share of finance reduces inequality, which is against the financialization hypothesis, and social conditions have expected effects on income inequality. While an increased share of both agriculture and service sectors tends to reduce inequality, an increased share of manufacture sector has no effect on inequality. This study finds that falling poverty increases inequality, implying that policy to reduce poverty might not be neutral for inequality and instead cannot prevent it from increasing. Since the higher the college participation rate the higher income inequality tends to be, it does not automatically imply that in order to reduce inequality we need to reduce the number of people who go to college. It might be the case that the college participation rate has not reached a turning point, below which its increase increases inequality, but beyond which its increases reduces inequality. AbstrakPenelitian ini mengkaji pengaruh perubahan struktur ekonomi, finansialisasi, dan kondisi sosial terhadap ketimpangan pendapatan. Menggunakan data panel dengan cross-section 32 propinsi di Indonesia dan rentang waktu 2007-2013, penelitian ini menemukan bahwa perubahan struktural mempengaruhi ketimpangan, kenaikan sumbangan sektor keuangan dalam PDB cenderung menurunkan ketimpangan, yang berarti bertentangan dengan hipotesis finansialisasi, dan kondisi sosial juga berpengaruh terhadap ketimpangan. Sementara kenaikan sumbangan baik sektor pertanian maupun sektor jasa dalam PDB cenderung mengurangi ketimpangan, kenaikan sumbangan sektor industri terbukti tidak mempengaruhi ketimpangan. Studi ini juga menemukan bahwa turunnya tingkat kemiskinan justru manaikkan ketimangan, sehingga kebijakan untuk menurunkan kemiskinan bisa bersifat tidak netral terhadap ketimpangan, melainkan tidak mampu membiarkan ketimpangan untuk tidak naik. Juga ditemukan bahwa kenaikan angka partisipasi kuliah justru menaikkan ketimpangan, yang mengimplikasikan bahwa angka ini belum mencapai titik belok (turning point).

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“…Our analysis focuses on the first two aspects. Rising inequality has taken the form of an increase in top incomes (Atkinson et al 2011) and a fall in the wage share (Stockhammer 2016a).…”

Section: Harvey 2005mentioning

confidence: 99%

European growth models and working class restructuring: An International post-Keynesian Political Economy perspective

2016

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This paper builds on post-Keynesian macroeconomics, the French Regulation Theory and a Neo-Gramscian International Political Economy approach to class analysis to propose an International post-Keynesian Political Economy approach that is used to offer an empirical analysis of European growth models and working class restructuring in Europe between 2000 and 2008. We will distinguish between the 'East', the 'North', and the 'South' and structure our analysis around industrial upgrading, financialisation and working class coherence. We find an export-driven growth model in the North, which came with wage suppression and outsourcing to the East. In the East the growth model can be characterised as dependent upgrading, which allowed for high real wage growth despite declining working class coherence. The South experienced a debt-driven growth model with a real estate bubble and high inflation rates resulting in large current account deficits. Our analysis shows that class restructuring forms an integral part in the economic process that resulted in European imbalances and the Euro crisis.

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Determinants of the Wage Share: A Panel Analysis of Advanced and Developing Economies

Cited by 191 publications

References 56 publications

Financialisation in emerging economies: a systematic overview and comparison with Anglo-Saxon economies

Financialisation in emerging economies: a systematic overview and comparison with Anglo-Saxon economies

Determinant of income inequality in Indonesia

European growth models and working class restructuring: An International post-Keynesian Political Economy perspective

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