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Vol. 42 No. 75 (2023)

Economic theory

Distribution and Growth in Open Economies: A Post-kaleckian Explanation

https://doi.org/10.19053/01203053.v42.n75.2023.15127

Published 2023-03-23

  • Daniel Velázquez Orihuela

Daniel Velázquez Orihuela
Universidad Autonóma del Estado de Hidalgo

Abstract

In this paper the framework proposed by Velázquez (2022) is expanded to analyze the bidirectional relationship between the economic growth and the functional income distribution in open economies. Two exchange regimes are analyzed: the fixed and floating exchange rates. It is shown that if growth is led by wage, growth and distribution paths are cyclic, regardless the exchange rate policies. On the other hand, if growth is led by profits and the exchange rate is flexible, then growth is steady and the profit sharing goes upwards. However, if in this scenario there is a fix exchange rate, the growth and distribution paths are cyclic.

Keywords

Post-Kaleckian, growth, distribution, wage-led growth, profit-led growth

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