Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/324101 
Year of Publication: 
2024
Citation: 
[Journal:] PSL Quarterly Review [ISSN:] 2037-3643 [Volume:] 77 [Issue:] 308 [Year:] 2024 [Pages:] 59-87
Publisher: 
Associazione Economia civile, Rome
Abstract: 
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.
Subjects: 
Distributive-Demand Dynamics
Globalization
Neo-Goodwinian Model
Panel Data Analysis
Post-Keynesian Economics
JEL: 
C23
E12
E25
O47
O57
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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