“…However, both theoretical and empirical studies indicate that there is a possibility of endogeneity in the wage share. By construction, the wage share is equal to the real wage divided by labor productivity (Nikiforos & Foley, 2012; Taylor, 2004). From the empirical side, some studies, such as Barbosa‐Filho and Taylor (2006) and Stockhammer and Onaran (2004), use the systems (aggregative) approach to deal with the endogeneity of distribution.…”
This study introduces the partial identification of the structural vector autoregressive model to estimate the effect of income distribution on output. For this purpose, this study follows the Post-Keynesian growth models and identifies the demand regimes in Latin American countries for the period 1960-2014. The main results reveal that Bolivia, Colombia, Honduras, and Panama have profit-led regimes.In addition, Costa Rica, Nicaragua, Peru, and Uruguay have wage-led regimes. The regimes of Brazil,
“…However, both theoretical and empirical studies indicate that there is a possibility of endogeneity in the wage share. By construction, the wage share is equal to the real wage divided by labor productivity (Nikiforos & Foley, 2012; Taylor, 2004). From the empirical side, some studies, such as Barbosa‐Filho and Taylor (2006) and Stockhammer and Onaran (2004), use the systems (aggregative) approach to deal with the endogeneity of distribution.…”
This study introduces the partial identification of the structural vector autoregressive model to estimate the effect of income distribution on output. For this purpose, this study follows the Post-Keynesian growth models and identifies the demand regimes in Latin American countries for the period 1960-2014. The main results reveal that Bolivia, Colombia, Honduras, and Panama have profit-led regimes.In addition, Costa Rica, Nicaragua, Peru, and Uruguay have wage-led regimes. The regimes of Brazil,
“…Readers of his books of course know that he customarily acknowledged the support of the canine, caprine, equine, porcine, gallinaceous and anserine critters at the farm (e.g. Taylor, 2004: ix) — singling out the geese for their insights in neoclassical growth theory. As Duncan Foley (2022), Lance's New School colleague and co‐author remembers: Lance had what one might call a casual approach to every‐day dress, though he appeared for public talks well turned out even with rather jaunty accessories.…”
“…He explains that if inflation is high and volatile over several periods, agents will seek to develop indexation mechanisms to protect their real incomes against the effects caused by a possible acceleration of inflation. This institutional mechanism naturally maintains inflation, but it may also accelerate it (see also Taylor, 2004). Indexation of wages on prices adds to the distribution conflict, making it difficult for a stable and low inflationary compromise to emerge over the share-out of value added.…”
Section: Indexation Mechanisms Develop In a High-inflation Regimementioning
This article uses a post-Keynesian framework to analyse the inflationary process at work from 1948 until the 1980s in an attempt to understand the origins of the near-hyperinflation of the first semester 1985 and the success of the stabilization plan introduced that same summer. In 1985 the shekel seems to have been entirely abandoned by its users for the U.S. dollar, which, in the context of high inflation of the time should have caused hyperinflation. Such an outcome results from the conjunction of several factors: the historic virulence of the distribution conflict, the presence of indexation mechanisms, and the fragility of the balance of payments marked by a structural current deficit. The stabilization plan, supported by substantial U.S. financial aid, immediately attenuated the external financing constraint and lastingly eased the distribution conflict, thereby averting the hyperinflationary risks. Analysis of this historical trajectory confirms the theoretical coherence of the post-Keynesian analysis of hyperinflation.
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