Competition-oriented Wage Policy and Its Effects on Aggregate Demand in the Netherlands

This paper aims at empirically assessing the demand effects of changes in functional income distribution for the Netherlands. Based on a Neo-Kaleckian theoretical macroeconomic model, equations for the main demand aggregates (consumption, investment, exports and imports) are estimated. The effect of an increase in the wage share on these aggregates is calculated from comparative static. Alternatively, a simulation of this effect is run by means of a small macroeconomic model. An increase in the wage share would have positive effects on consumption and affects investment and net exports negativ... Mehr ...