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The Wage‐Share in an Open Economy. Discussing Mexico's Experience
Author(s) -
López G Julio,
MalagambaMorán Ana Sofía
Publication year - 2017
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/meca.12146
Subject(s) - economics , wage , wage share , distribution (mathematics) , monopoly , income distribution , small open economy , labour economics , open economy , prime (order theory) , economy , exchange rate , macroeconomics , market economy , efficiency wage , inequality , mathematical analysis , mathematics , combinatorics
ABSTRACT Mexico's wage share in manufacturing has shown a downward trend. We discuss the main factors that have shaped this evolution during the period of 1994 to 2009 and we analyze this issue on the basis of Kalecki's theory of income distribution, but adapting to an open economy. We show that, changes in the degree of monopoly and in the composition of prime costs have had a great impact on income distribution. Further, trade opening has contributed to magnify the effect on manufacturing wage share of changes in the exchange rate.