Monday, January 6, 2014

Arslan Razmi on South-South trade and the limits to wage-led growth

Another presentation from the same session at the ASSA in Philadelphia. Arslan extends (Power Point here) the so-called Neo-Kaleckian model to show that destination of exports matter. He suggested that in this kind of model the limit to wage-led growth does not come from the conventional negative effect of wages on external competitiveness (real exchange rate appreciation, as in Robert Blecker's famous 1989 paper), but as the result of the negative effect of higher wages on capacity utilization and investment in the "homogenous" good sector (tradable, but price taking sector that he suggests might characterize South-South trade).
By -
Labels: , , , ,

1 comment:

  1. David FieldsJanuary 6, 2014 at 8:16 PM

    Just for clarification, and understanding, isn't the suggestion of a negative effect of higher wages on capacity utilization and investment in the homogenous goods sector a modified balassa-samuelson model argument?

    ReplyDelete

Subscribe to: Post Comments (Atom)

Inflation, real wages, and the election results

Almost everybody these days accepts at face value that the result of the election was heavily determined by negative perceptions about Biden...

  • Blog Moving to Substack (and first post)
    "Where is Everybody?" The blog will continue here for announcements, messages and links to more substantive pieces. But those will...
  • Hyperinflation in Bitcoinland
    There are Gold Bugs and there are  Bitcoin Bugs. They all oppose fiat money (hate the Fed and other monetary authorities) and follow some s...
  • A reply to Wray - Part I
    By Sergio Cesaratto (Guest Blogger) “The fact that individual countries no longer have their own currencies and central banks will put n...