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Distribution and globalization. A wage bargaining model.

Onaran, Özlem (2005) Distribution and globalization. A wage bargaining model. Working Papers Series "Growth and Employment in Europe: Sustainability and Competitiveness", 48. Inst. für Volkswirtschaftstheorie und -politik, WU Vienna University of Economics and Business, Vienna.

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Abstract

This paper develops a model of distribution to analyze the effects of neoliberal globalization on labor in the developing countries. Distribution is determined via wage bargaining by workers, price setting by firms, and improvements in productivity. The full model has the nature of a Post-Keynesian conflicting claims model for an open economy under the pressure of globalization. The conflict inflation is extended to an open economy case with imported inputs, where the pass through effect of the depreciation of the local currency also becomes important. The variables that reflect the macroeconomic effects of globalization are modeled as parameters that affect the bargaining power of labor on two levels: the first group is related with the interaction with the global economy, i.e. international trade, and FDI. The second is about the domestic fiscal and monetary policy variables, which are particularly related to the specific form that globalization takes in the era of neoliberalism, i.e. government expenditures, and the interest rate. Then the model is solved for distribution of income, i.e. the wage share, thus a reduced form of the model is obtained, which is estimated in a companion paper to test whether the change in the international and domestic macroeconomic environment has affected the decline the labor's share. (author's abstract)

Item Type: Paper
Keywords: labor's share / neoliberal policies / globalization
Classification Codes: JEL E240, O150, O190, J230, J300, F020
Divisions: Departments > Volkswirtschaft
Depositing User: Repository Administrator
Date Deposited: 01 Mar 2005 17:49
Last Modified: 12 Sep 2015 16:37
URI: http://epub.wu.ac.at/id/eprint/1054

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