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The effects of social infrastructure and gender equality on output and employment: The case of South Korea

A notable feature of income distribution is the widening wage differential among workers: there is a redistribution in favour of managers at the detriment of ordinary workers. The paper incorporate...

Overhead Labour Costs in a Neo-Kaleckian Growth Model with Autonomous Non-Capacity Creating Expenditures

Abstract This paper contributes to the growth models debate by expanding the concept of growth drivers to emerging capitalist economies (ECEs). Conceptually, the paper synthesizes growth drivers with a growth model operationalization based on GDP growth contributions and financial sector balances. Drawing on post-Keynesian and structuralist economics, as well as, empirical studies, seven growth drivers for ECEs are reviewed: income distribution, price and non-price competitiveness, commodity prices, private debt, foreign direct investment (FDI) and fiscal policy. Descriptive data for these drivers are presented for 19 regionally grouped ECEs between 2000 and 2019. On average, Asian ECEs exhibit higher growth rates, stable real exchange rates, high and increasing non-price competitiveness and high private debt levels. Latin American countries show comparatively lower growth rates, high but decreasing income inequality, unstable exchange rates and relatively expansionary fiscal policy after the Global Financial Crisis (GFC). Central and Eastern European countries generally display medium to high growth rates, lower income inequality, high non-price competitiveness, a substantial FDI stock and, after the GFC, real depreciations and contractionary fiscal policy. The assessment of cross-country growth drivers via bivariate coefficients reveals limited robust results, except for non-price competitiveness, which emerges as a significant driver. Additionally, we find indications that private debt and expansionary fiscal policy became more important for growth in ECEs after the GFC. This is in line with the emergence of domestic demand- and private debt-led growth models in ECEs following the GFC in the course of private deleveraging and austerity policies in developed capitalist economies. 

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Growth drivers in emerging capitalist economies: building blocks for a post-Keynesian analysis and an empirical exploration of the years before and after the Global Financial Crisis

Income-led growth is at the core of the Moon Jae-in administration’s economic policy. It aims to build an inclusive economy by enhancing the capacity of household consumption and improving distribution, through a more active role of the state and social agreements. This report laregely reviews what the Moon administration’s income-led growth has achieved and has not, as of the end of 2019 (due to the data availability). The reader is advised to keep in mind that the administration had been in two and a half years into the 5-year term by the end of 2019, and the growth effect may take a longer time to realize. The main goal of this interim review is to share the rare case of the income-led growth policies with the policy research circles abroad.

Su Min Jeon

Papers

The Income-led Growth in Korea: Status, Prospects and Lessons for Other Countries