Wage-led or profit-led economic growth : the case of Chile 1996-2017
Professor Advisor
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López, Ramón
Author
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Villanueva, Fernando
Admission date
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2020-06-24T00:43:18Z
Available date
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2020-06-24T00:43:18Z
Publication date
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2018-12
Identifier
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https://repositorio.uchile.cl/handle/2250/175669
General note
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Tesis para optar al grado de Magíster en Análisis Económico
es_ES
Abstract
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The main objective of this work is to estimate the effects of income redistribution on economic
growth in Chile with a post-Kaleckian/post-Keynesian approach. We analyze the period between
1996-2017, identifying the effect of an increase in the profit share on aggregate demand. We
seek to highlight the “forgotten” role of wages as a source of demand and try to understand the
macroeconomic effects of inequality such as its impact on achieving long-term economic growth.
Our main results show that an increase of 1%-point in the profit share will lead to a contraction
of 0.44% in aggregate demand, which indicates that Chilean economic growth is wage-led.
Furthermore, we use an innovative approach by testing whether economic growth is wage-led or
profit-led. Allowing for possible transformations from one regime to the other over the period
analyzed. The conclusions are that for a significant part of the period, economic growth in Chile
was wage-led. Which means that in such period an increase in the wage rate would cause faster
economic growth. In other words, improving income distribution would be consistent with faster
economic growth.