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A mathematical contribution to the economic growth theory. Evidence on the relationship between wages and output from the Italian regions

Author

Listed:
  • Ferrentino, Rosa

    (University of Salerno)

  • Vota, Luca

    (University of Salerno)

Abstract

In this manuscript, the authors empirically assess the impact of an increase in the wage per worker on the GDP per capita of the Italian regions. To achieve this research aim, the authors carry out a panel data regression analysis, relying on an identification strategy based on the standard Neoclassical model of economic growth. The authors’ results suggest that, on average, the output effect of an increase in the wage per worker is positive, with a substantial difference between the Northern and Center-Southern regions. The authors’ policy implication is that wage moderation does not represent a remedy to the economic stagnation that the Italian regions have been experiencing since the second half of the 1990s.

Suggested Citation

  • Ferrentino, Rosa & Vota, Luca, 2023. "A mathematical contribution to the economic growth theory. Evidence on the relationship between wages and output from the Italian regions," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 57, pages 111-133.
    • Handle: RePEc:ris:invreg:0518
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    More about this item

    Keywords

    Wage-led economic growth; wage per worker; regional development; Neo-Kaleckian economics; Neoclassical economics;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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