From the Crisis of Distribution to the Distribution of the Costs of the Crisis: What Can We Learn from Previous Crises about the Effects of the Financial Crisis on Labor Share?
The working paper analyzes the possible distributional consequences of the global crisis based on the lessons of past crises. The decline in the labor share across the globe has been a major factor that led to the current global crisis. Onaran argues that this is a crisis of distribution, and similarly the policy reactions to the crisis are part of a distributional struggle. The paper presents the effects of the former crises in the developing countries and in Japan on income distribution, wages, and unemployment. This comparison is important not only because it compares developing and developed country cases, but also because it highlights the differences between the currency crises and domestic financial crises as to the distributional consequences. Despite differences, the cumulative effect is in both cases a dramatic pro-capital redistribution. Building on these lessons, the paper discusses the possible different effects of the current global crisis in the developed countries, Eastern Europe, and developing countries, and concludes with policy alternatives to avoid the socialization of the costs of the crisis.
|Date of creation:||2009|
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- Maurice Obstfeld & Kenneth S. Rogoff, 2005.
"Global Current Account Imbalances and Exchange Rate Adjustments,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 36(1), pages 67-146.
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- James Crotty & Gerald Epstein, 2008. "Proposals for Effectively Regulating the U.S. Financial System to Avoid Yet Another Meltdown," Working Papers wp181, Political Economy Research Institute, University of Massachusetts at Amherst.
- James Crotty & Gerald Epstein, 2008. "Proposals for Effectively Regulating the U.S. Financial System to Avoid Yet Another Meltdown," UMASS Amherst Economics Working Papers 2008-15, University of Massachusetts Amherst, Department of Economics.
- Dean Baker, 2006. "Recession Looms for the U.S. Economy in 2007," CEPR Reports and Issue Briefs 2006-29, Center for Economic and Policy Research (CEPR).
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- Thomas I. Palley, 2009. "After the Bust: The Outlook for Macroeconomics and Macroeconomic Policy," Economics Public Policy Brief Archive ppb_97, Levy Economics Institute. Full references (including those not matched with items on IDEAS)
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