Distribution and Globalization: A Wage Bargaining Model
This paper develops a model of distribution to analyze the effects of neoliberal globalization on labor in the developing countries. Distribution is determined via wage bargaining by workers, price setting by firms, and improvements in productivity. The full model has the nature of a Post-Keynesian conflicting claims model for an open economy under the pressure of globalization. The conflict inflation is extended to an open economy case with imported inputs, where the pass through effect of the depreciation of the local currency also becomes important. The variables that reflect the macroeconomic effects of globalization are modeled as parameters that affect the bargaining power of labor on two levels: the first group is related with the interaction with the global economy, i.e. international trade, and FDI. The second is about the domestic fiscal and monetary policy variables, which are particularly related to the specific form that globalization takes in the era of neoliberalism, i.e. government expenditures, and the interest rate. Then the model is solved for distribution of income, i.e. the wage share, thus a reduced form of the model is obtained, which is estimated in a companion paper to test whether the change in the international and domestic macroeconomic environment has affected the decline the labor’s share.
|Date of creation:||Feb 2005|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.wu.ac.at/economics/en
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.:
- Peter R. Fallon & Robert E. B. Lucas, 2002.
"The Impact of Financial Crises on Labor Markets, Household Incomes, and Poverty: A Review of Evidence,"
World Bank Research Observer,
World Bank Group, vol. 17(1), pages 21-45.
- Peter R. Fallon & Robert E. B. Lucas, 2000. "The Impact of Financial Crises on Labor Markets, Household Incomes and Poverty: A Review of Evidence," Boston University - Institute for Economic Development 103, Boston University, Institute for Economic Development.
- Barro, Robert J, 2000. " Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
- Dollar, David & Kraay, Aart, 2001.
"Trade, growth, and poverty,"
Policy Research Working Paper Series
2615, The World Bank.
- Kang-Kook Lee & James Crotty, 2004. "Was the IMF's Imposition of Economic Regime Change Justified? A Critique of the IMF's Economic and Political Role in Korea During and After the Crisis," Working Papers wp77, Political Economy Research Institute, University of Massachusetts at Amherst.
- James Crotty & Kang-Kook Lee, 2002. "A political-economic analysis of the failure of neo-liberal restructuring in post-crisis Korea," Cambridge Journal of Economics, Oxford University Press, vol. 26(5), pages 667-678, September.
- Gary Dymski & James Crotty, 2000. "Can the Global Neoliberal Regime Survive Victory in Asia? The Political Economy of the Asian Crisis," Published Studies ps5, Political Economy Research Institute, University of Massachusetts at Amherst.
- Harrison, Ann, 2005. "Has Globalization Eroded Labor’s Share? Some Cross-Country Evidence," MPRA Paper 39649, University Library of Munich, Germany.
When requesting a correction, please mention this item's handle: RePEc:wiw:wiwgee:geewp48. See general information about how to correct material in RePEc.
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.