Reconsidering the Dynamic Interaction between Real Wages and Macroeconomic Activity

Mamadou Bobo Diallo, Peter Flaschel, Hans-Martin Krolzig, Christian R. Proaño

Abstract


In this paper we investigate the role and the feedback structure of income distribution in the macro-dynamics of the U.S. economy after World War II. Among other things we analyze both theoretically and empirically the influence of job insiders on wage determination. Furthermore, by means of system GMM estimation we find empirical evidence of a negative dependence of the goods market dynamics on the development of functional income distribution in the U.S. economy.

Full Text: PDF DOI: 10.5430/rwe.v2n1p77

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.

Research in World Economy
ISSN 1923-3981(Print) ISSN 1923-399X(Online)

 

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