2016
DOI: 10.1111/meca.12146
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The Wage‐Share in an Open Economy. Discussing Mexico's Experience

Abstract: Mexico's wage share in manufacturing has shown a downward trend. We discuss the main factors that have shaped this evolution during the period of 1994 to 2009 and we analyze this issue on the basis of Kalecki's theory of income distribution, but adapting to an open economy. We show that, changes in the degree of monopoly and in the composition of prime costs have had a great impact on income distribution. Further, trade opening has contributed to magnify the effect on manufacturing wage share of changes in the… Show more

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Cited by 10 publications
(1 citation statement)
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“…This contrast is attributed to differences between sectors in price formation mechanisms together with contrasting labour productivity trends (fast growth in the tradable sector and stagnation, with few exceptions, in the non-tradable sector). Also within a Kaleckian framework, López and Malagamba-Morán (2016) study the evolution of the share of wages in manufacturing value added during the period 1994-2009, and show that the fall in the wage share since the early 2000s had, as counterpart, a rise in the gross profit margin (calculated as the ratio of price to unit variable cost). In econometric estimations for a panel of manufacturing industries, they find that among other variables the profit margin is positively correlated with the real exchange rate (the inverse of the real value of the peso) and the share of manufacturing exports in output.…”
Section: Introductionmentioning
confidence: 99%
“…This contrast is attributed to differences between sectors in price formation mechanisms together with contrasting labour productivity trends (fast growth in the tradable sector and stagnation, with few exceptions, in the non-tradable sector). Also within a Kaleckian framework, López and Malagamba-Morán (2016) study the evolution of the share of wages in manufacturing value added during the period 1994-2009, and show that the fall in the wage share since the early 2000s had, as counterpart, a rise in the gross profit margin (calculated as the ratio of price to unit variable cost). In econometric estimations for a panel of manufacturing industries, they find that among other variables the profit margin is positively correlated with the real exchange rate (the inverse of the real value of the peso) and the share of manufacturing exports in output.…”
Section: Introductionmentioning
confidence: 99%