2 research outputs found
Wageâled versus profitâled demand: a comprehensive empirical analysis
This study investigates various economic factorsâ impact in determining the relationship between functional income distribution and aggregate demand from both a theoretical and an empirical viewpoint. We base our analysis on a demandâdriven growth model for an open economy that allows for either profitâled or wageâled regimes. Our results strongly indicate that a higher level of trade openness is associated with a lower probability of being wageâled. We find evidence that lower wage inequality makes an economy more wageâled and that countries with a greater private creditâtoâgross domestic product (GDP) ratio are more likely to be profitâled