Demand effects of the falling wage share in Austria
AbstractThis paper aims at empirically estimating the demand effects of changes in functional income distribution for Austria. Based on a Post-Kaleckian macro model, this paper estimates the effects of a change in the wage share on the main demand aggregates. The results for the behavioral functions for consumption, investment, prices, exports and imports are compared with the specifications of the WIFO macro model and the IHS macro model. A reduction in the wage share has a restrictive effect on domestic demand as consumption decreases more strongly than investment increases. Because of the strong effects on net exports the overall effects of a decrease in the wage share are expansionary. However the latter effect operates only as far as the fall in the wage share increases competitiveness. As wage shares were also falling in Austria’s main trading partners, the effect seems to have been neutralized.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Vienna University of Economics, Department of Economics in its series Department of Economics Working Papers with number wuwp106.
Date of creation: Aug 2007
Date of revision:
Note: PDF Document
Contact details of provider:
Postal: Welthandelsplatz 1, 1020 Vienna, Austria
Web page: http://www.wu.ac.at/economics/en
Other versions of this item:
- Engelbert Stockhammer & Stefan Ederer, 2008. "Demand effects of the falling wage share in Austria," Empirica, Springer, vol. 35(5), pages 481-502, December.
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
- E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Engelbert Stockhammer & �zlem Onaran & Stefan Ederer, 2009.
"Functional income distribution and aggregate demand in the Euro area,"
Cambridge Journal of Economics,
Oxford University Press, vol. 33(1), pages 139-159, January.
- Engelbert Stockhammer & Özlem Onaran & Stefan Ederer, 2007. "Functional income distribution and aggregate demand in the Euro-area," Department of Economics Working Papers wuwp102, Vienna University of Economics, Department of Economics.
- Fritz Breuss, 2007.
"Globalization, EU Enlargement and Income Distribution,"
FIW Working Paper series
- Fritz Breuss, 2007. "Globalization, EU Enlargement and Income Distribution," WIFO Working Papers 296, WIFO.
- Spitzer, Martin & Fenz, Gerhard, 2005. "AQM – The Austrian Quarterly Model of the Oesterreichische Nationalbank," Working Papers 104, Oesterreichische Nationalbank (Austrian Central Bank).
- R. Glenn Hubbard, 1998.
"Capital-Market Imperfections and Investment,"
Journal of Economic Literature,
American Economic Association, vol. 36(1), pages 193-225, March.
- repec:int:journl:v:3:y:2006:i:2:p:351-369 is not listed on IDEAS
- Eckhard Hein & Carsten Ochsen, 2003. "Regimes of Interest Rates, Income Shares, Savings and Investment: A Kaleckian Model and Empirical Estimations for some Advanced OECD Economies," Metroeconomica, Wiley Blackwell, vol. 54(4), pages 404-433, November.
- Josef Baumgartner & Fritz Breuss & Serguei Kaniovski, 2004. "WIFO-Macromod. An Econometric Model of the Austrian Economy," WIFO Working Papers 241, WIFO.
- Thomas I. Palley, 2006. "Currency Unions, the Phillips Curve, and Stabilization Policy: Some Suggestions for Europe," European Journal of Economics and Economic Policies: Intervention, Edward Elgar, vol. 3(2), pages 351-369.
- Eckhard Hein & Lena Vogel, 2007. "Distribution and growth reconsidered - empirical results for Austria, France, Germany, the Netherlands, the UK and the USA," IMK Working Paper 03-2007, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Bhaduri, Amit & Marglin, Stephen, 1990. "Unemployment and the Real Wage: The Economic Basis for Contesting Political Ideologies," Cambridge Journal of Economics, Oxford University Press, vol. 14(4), pages 375-93, December.
- Blecker, Robert A, 1989. "International Competition, Income Distribution and Economic Growth," Cambridge Journal of Economics, Oxford University Press, vol. 13(3), pages 395-412, September.
- Stockhammer, Engelbert & Onaran, Ozlem, 2004. "Accumulation, distribution and employment: a structural VAR approach to a Kaleckian macro model," Structural Change and Economic Dynamics, Elsevier, vol. 15(4), pages 421-447, December.
- Eckhard Hein & Marc Lavoie & Till van Treeck, 2008.
"Some instability puzzles in Kaleckian models of growth and distribution: A critical survey,"
IMK Working Paper
19-2008, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Eckhard Hein & Marc Lavoie & Till van Treeck, 2011. "Some instability puzzles in Kaleckian models of growth and distribution: a critical survey," Cambridge Journal of Economics, Oxford University Press, vol. 35(3), pages 587-612.
- Hein, Eckhard, 2011.
"Distribution, 'financialisation' and the financial and economic crisis: Implications for post-crisis economic policies,"
IPE Working Papers
09/2011, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
- Hein, Eckhard, 2011. "Distribution, ‘Financialisation’ and the Financial and Economic Crisis – Implications for Post-crisis Economic Policies," MPRA Paper 31180, University Library of Munich, Germany.
- Jochen Hartwig, 2014. "Testing the Bhaduri-Marglin Model with OECD Panel Data," KOF Working papers 14-349, KOF Swiss Economic Institute, ETH Zurich.
- Özlem Onaran & Giorgos Galanis, 2013.
"Income Distribution and Aggregate Demand: A Global Post-Keynesian Model,"
wp319, Political Economy Research Institute, University of Massachusetts at Amherst.
- Özlem Onaran & Giorgos Galanis, 2013. "Income distribution and aggregate demand: A global Post-Keynesian model," Working Papers PKWP1304, Post Keynesian Economics Study Group (PKSG).
- Eckhard Hein & Artur Tarassow, 2010.
"Distribution, aggregate demand and productivity growth: theory and empirical results for six OECD countries based on a post-Kaleckian model,"
Cambridge Journal of Economics,
Oxford University Press, vol. 34(4), pages 727-754.
- Eckhard Hein & Artur Tarassow, 2008. "Distribution, aggregate demand and productivity growth - theory and empirical results for six OECD countries based on a Post-Kaleckian model," IMK Working Paper 18-2008, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Onaran, Özlem & Galanis, Giorgos, 2012. "Is aggregate demand wage-led or profit-led? National and global effects," ILO Working Papers 478623, International Labour Organization.
- Jochen Hartwig, 2013. "Ist Lohnzurückhaltung gut oder schlecht für das Schweizer Wirtschaftswachstum?," KOF Analysen, KOF Swiss Economic Institute, ETH Zurich, vol. 7(2), pages 33-45, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Department of Economics).
If references are entirely missing, you can add them using this form.