Profits and Wages in Ireland, 1987-1996
AbstractA striking feature of the Irish economic resurgence since 1987 has been a major factor income shift away from labour towards capital. (The profit share has increased from 25.1 percent in 1987 to 34.8 percent in 1996.) In this paper, we examine the role of the national stratey of wage moderation in explaining this shift, consider its potential benefits and ask whether it is sustainable. We highlight the critical role of fiscal policy in minimising the trade-off between the returns to capital and labour. Finally, imminent membership of a European Monetary Union makes it all the more important not to overshoot the equilibrium rate of wage growth for the Irish economy.
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Bibliographic InfoPaper provided by Trinity College Dublin, Department of Economics in its series Economics Technical Papers with number 9814.
Date of creation: 1998
Date of revision:
Find related papers by JEL classification:
- E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
- J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
- O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
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