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Egalitarianism Policy and Effective Demand under Globalization

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  • Taro Abe
Abstract
The study examines egalitarianism policies in terms of the relationship between la- bor and capital and extends the model developed by the economist Bowles. We intro- duce the demand factor to the Bowles model (2012), which discussed the effectiveness of the income and asset redistribution policies in a global economy. The improvement of productivity and the decrease in the ratio of monitoring labor through asset-based redistribution increase the real wage rate because of its lure for foreign capital. At this point in the Bowles model, the labor supply increases and then employment increases. In contrast, in our model, with the addition of the demand factor, the improvement of productivity increases employment, but the decrease in monitoring labor does not always increase employment as both demand and supply increase. This means that asset-based redistribution in a global economy is not always effective.

Suggested Citation

  • Taro Abe, 2015. "Egalitarianism Policy and Effective Demand under Globalization," Discussion papers e-15-003, Graduate School of Economics Project Center, Kyoto University.
    • Handle: RePEc:kue:dpaper:e-15-003
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    References listed on IDEAS

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    1. Samuel Bowles and Robert Boyer., 1988. "Labor Discipline and Aggregate Demand: A Macroeconomic Model," Economics Working Papers 8875, University of California at Berkeley.
    2. Peter Skott, 2012. "Theoretical And Empirical Shortcomings Of The Kaleckian Investment Function," Metroeconomica, Wiley Blackwell, vol. 63(1), pages 109-138, February.
    3. Bowles, Samuel & Boyer, Robert, 1988. "Labor Discipline and Aggregate Demand: A Macroeconomic Model," Department of Economics, Working Paper Series qt8sb2623g, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    4. Eckhard Hein & Marc Lavoie & Till van Treeck, 2011. "Some instability puzzles in Kaleckian models of growth and distribution: a critical survey," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 35(3), pages 587-612.
    5. Blecker, Robert A, 1989. "International Competition, Income Distribution and Economic Growth," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 13(3), pages 395-412, September.
    6. Peter Skott & Ben Zipperer, 2012. "An empirical evaluation of three post-Keynesian models," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 9(2), pages 277-307.
    7. Bowles,Samuel, 2012. "The New Economics of Inequality and Redistribution," Cambridge Books, Cambridge University Press, number 9781107601604, September.
    8. Bowles,Samuel, 2012. "The New Economics of Inequality and Redistribution," Cambridge Books, Cambridge University Press, number 9781107014039, September.
    9. Bowles, Samuel & Boyer, Robert, 1988. "Labor Discipline and Aggregate Demand: A Macroeconomic Model," American Economic Review, American Economic Association, vol. 78(2), pages 395-400, May.
    10. Robert A. Blecker, 1998. "International Competitiveness, Relative Wages, and the Balance-Of-Payments Constraint," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 20(4), pages 495-526, July.
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    Cited by:

    1. Taro Abe, 2017. "Egalitarian Policies and Effective Demand: Considering Balance of Payments," Discussion papers e-17-002, Graduate School of Economics , Kyoto University.

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    More about this item

    Keywords

    Egalitarianism; Redistribution; Effective Demand; Globalization;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • J80 - Labor and Demographic Economics - - Labor Standards - - - General
    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy

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