This paper discusses the existence of different accumulation regimes in developed and developing economies. The central issue to be analyzed refers to the effect of an increase in the wage share in national income on output growth. When such increase positively affects output, the accumulation regime is wage-led. Otherwise, the regime is profit-led. The main hypothesis to be tested is that developing economies are characterized by wage-led regimes, whereas in developed countries accumulation is profit-led. In this paper, we apply the model developed by Barbosa-Filho and Taylor (2006) to test this hypothesis for the cases of UK and Turkey. The empirical evidence presented here, by the use of a VAR model, supports the hypothesis.
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Length: 24 pages Date of creation: Oct 2007 Date of revision: Handle: RePEc:cdp:texdis:td322
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Find related papers by JEL classification: E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
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