A global race to the bottom: The neo-Goodwinian aggregative-systems estimation of income distribution and capacity utilization interactions
The neoliberal reforms since the 1980s have resulted in rapid globalization paralleled by worsening income distribution. In this paper, I first show that most countries worldwide (58 of 81) have experienced a decline in the labor share of income, or the wage share, during 1950-2019. Second, I estim...
| Main Author: | |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Associazione Economia civile
2024-04-01
|
| Series: | PSL Quarterly Review |
| Subjects: | |
| Online Access: | https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/18186 |
| _version_ | 1797193615642984448 |
|---|---|
| author | Tanadej Vechsuruck |
| author_facet | Tanadej Vechsuruck |
| author_sort | Tanadej Vechsuruck |
| collection | DOAJ |
| description |
The neoliberal reforms since the 1980s have resulted in rapid globalization paralleled by worsening income distribution. In this paper, I first show that most countries worldwide (58 of 81) have experienced a decline in the labor share of income, or the wage share, during 1950-2019. Second, I estimate the demand and distributive regimes from 81-country panel data based on the neo-Goodwinian model. At the global level, the short-run estimation shows that the distributive regime appears to be Marxian/profit-squeeze and the demand regime exhibits profit-led. I further separate the estimation into two groups: advanced and developing countries. The estimation still confirms the profit-led/profit-squeeze regimes in both groups, even though the demand and distributive regimes are stronger in advanced economies. In the long run, the results reveal a global race to the bottom: a decline in the long-run wage share. Neither positive nor negative gain is founded on capacity utilization in advanced and developing countries.
|
| first_indexed | 2024-04-24T05:43:12Z |
| format | Article |
| id | doaj.art-eeb9ab7df4774226b98d26ea859fcb40 |
| institution | Directory Open Access Journal |
| issn | 2037-3635 2037-3643 |
| language | English |
| last_indexed | 2024-04-24T05:43:12Z |
| publishDate | 2024-04-01 |
| publisher | Associazione Economia civile |
| record_format | Article |
| series | PSL Quarterly Review |
| spelling | doaj.art-eeb9ab7df4774226b98d26ea859fcb402024-04-23T19:23:25ZengAssociazione Economia civilePSL Quarterly Review2037-36352037-36432024-04-017730810.13133/2037-3643/18186A global race to the bottom: The neo-Goodwinian aggregative-systems estimation of income distribution and capacity utilization interactionsTanadej Vechsuruck0University of Rhode Island The neoliberal reforms since the 1980s have resulted in rapid globalization paralleled by worsening income distribution. In this paper, I first show that most countries worldwide (58 of 81) have experienced a decline in the labor share of income, or the wage share, during 1950-2019. Second, I estimate the demand and distributive regimes from 81-country panel data based on the neo-Goodwinian model. At the global level, the short-run estimation shows that the distributive regime appears to be Marxian/profit-squeeze and the demand regime exhibits profit-led. I further separate the estimation into two groups: advanced and developing countries. The estimation still confirms the profit-led/profit-squeeze regimes in both groups, even though the demand and distributive regimes are stronger in advanced economies. In the long run, the results reveal a global race to the bottom: a decline in the long-run wage share. Neither positive nor negative gain is founded on capacity utilization in advanced and developing countries. https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/18186Panel Data AnalysisPost-Keynesian EconomicsNeo-Goodwinian ModelDistributive-Demand DynamicsGlobalization |
| spellingShingle | Tanadej Vechsuruck A global race to the bottom: The neo-Goodwinian aggregative-systems estimation of income distribution and capacity utilization interactions PSL Quarterly Review Panel Data Analysis Post-Keynesian Economics Neo-Goodwinian Model Distributive-Demand Dynamics Globalization |
| title | A global race to the bottom: The neo-Goodwinian aggregative-systems estimation of income distribution and capacity utilization interactions |
| title_full | A global race to the bottom: The neo-Goodwinian aggregative-systems estimation of income distribution and capacity utilization interactions |
| title_fullStr | A global race to the bottom: The neo-Goodwinian aggregative-systems estimation of income distribution and capacity utilization interactions |
| title_full_unstemmed | A global race to the bottom: The neo-Goodwinian aggregative-systems estimation of income distribution and capacity utilization interactions |
| title_short | A global race to the bottom: The neo-Goodwinian aggregative-systems estimation of income distribution and capacity utilization interactions |
| title_sort | global race to the bottom the neo goodwinian aggregative systems estimation of income distribution and capacity utilization interactions |
| topic | Panel Data Analysis Post-Keynesian Economics Neo-Goodwinian Model Distributive-Demand Dynamics Globalization |
| url | https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/18186 |
| work_keys_str_mv | AT tanadejvechsuruck aglobalracetothebottomtheneogoodwinianaggregativesystemsestimationofincomedistributionandcapacityutilizationinteractions AT tanadejvechsuruck globalracetothebottomtheneogoodwinianaggregativesystemsestimationofincomedistributionandcapacityutilizationinteractions |