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Equality‐led Development and the Demand‐ and Supply‐side Effects
Author(s) -
Onaran Özlem
Publication year - 2019
Publication title -
development and change
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.267
H-Index - 93
eISSN - 1467-7660
pISSN - 0012-155X
DOI - 10.1111/dech.12488
Subject(s) - economics , demand side , supply side , wage share , income distribution , inequality , effective demand , investment (military) , labour economics , distribution (mathematics) , wage , post keynesian economics , market economy , macroeconomics , efficiency wage , political science , mathematical analysis , mathematics , politics , law
This contribution to the Forum Debate on global development focuses on the dimension of functional income distribution between labour and capital and its demand‐side and supply‐side effects. The article summarizes recent literature that has sought to explain the reasons behind the global fall in the labour share. It then discusses the demand‐side effects of the declining wage share on growth, based on the post‐Keynesian/post‐Kaleckian literature. The author presents an alternative policy scenario for the G20 based on a mix of increasing wage share and public investment, before discussing the supply‐side effects of rising inequality. The article concludes with some policy implications for equality‐led development.