An Empirical Characterization of Redistribution Shocks and Output Dynamics

Arbeitspapier

What are the economic effects of redistributing one dollar from profits to labour income? We address this question for the post-World War II economies of the United States and Canada within a structural VECM procedure allowing for up to two breaks of unknown timing. In the United States the short-run spending effect on growth, set in motion by higher labour income, is strong enough to make such a redistribution an attractive, maybe provocative, policy alternative. Across the border in Canada, however, the negative medium-run capacity effect, brought about by diminished profits, dominates the picture more or less from the beginning and output slumps considerably, a result actually suggesting a - maybe even more provocative - redistribution towards profits. We discuss several possible explanations such as the formation of expectations and the different exposure to international trade. Methodologically, we provide a novel procedure to estimate cointegrating rank and break dates jointly.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: wiiw Working Paper ; No. 68

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models ; Forecasting Models; Simulation Methods ; General Aggregative Models: Keynes; Keynesian; Post-Keynesian ; Aggregate Factor Income Distribution
• Thema: redistribution ; structural VECM ; joint estimation of cointegrating rank and multiple break dates

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Hauzenberger, Klemens ; Stehrer, Robert
• Ereignis: Veröffentlichung
• (wer): The Vienna Institute for International Economic Studies (wiiw)
• (wo): Vienna
• (wann): 2010

Weitere Informationen

• Handle: http://hdl.handle.net/10419/203933
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ