ST CATHARINE'S POLITICAL ECONOMY SEMINARS: ÖZLEM ONARAN

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• ÖZLEM ONARAN
• Wednesday 27 November 2013, 18:00-19:30
• The McGrath Centre, St Catharine's College.

If you have a question about this talk, please contact pa267.

The next St Catharine’s Political Economy Seminar in the series on the Economics of Austerity, will be held on Wednesday 27th November 2013 – Özlem Onaran will give a talk on ‘What happens to growth when there is a global race to the bottom in the share of labour?’ The seminar will be held in the McGrath Centre at St Catharine’s College from 6.00-7.30 pm. All are welcome.

ÖZLEM ONARAN is Professor of Workforce and Economic Development Policy at the University of Greenwich. She has done extensive research on issues of distribution, employment, globalization, and crisis. She is a member of the Coordinating Committee of the Research Network Macroeconomics and Macroeconomic Policies, and a research associate at the Political Economy Research Institute of the University of Massachusetts, Amherst. She has more than sixty articles in books and peer reviewed journals such as Cambridge Journal of Economics, World Development, Environment and Planning A, Public Choice, Economic Inquiry, European Journal of Industrial Relations, International Review of Applied Economics, Structural Change and Economic Dynamics, Eastern European Economics, and Review of Political Economy. She has directed research projects for the International Labour Organisation, the Austrian Science Foundation, and the Vienna chamber of Labour. For further information, including a list of publications, please visit http://www2.gre.ac.uk/about/schools/business/about/departments/ibe/staff/Ozlem-onaran

CONTENT : There has been a significant decline in the share of wages in GDP in both the developed and developing countries following the 1980s. The decline in the wage share and rise in personal income inequality has accompanied a poor performance in terms of growth in most countries with the exception of a few emerging economies like China and India. This paper estimates the effects of a change in the wage share on growth in the G20 countries (Euro area, Germany, France, Italy, UK, US, Japan, Canada, Australia, Turkey, Korea, Argentina, Mexico, China, India, and South Africa) using a post-Keynesian/post-Kaleckian model, analyses the interactions among different economies, and calculates the global multiplier effects of a simultaneous decline in the wage share. The most important finding is that the global economy in aggregate is wage-led. The policy conclusions of the paper shed light on the limits of strategies of international competitiveness based on wage competition in a highly integrated global economy, and point at the possibilities to correct global imbalances via coordinated macroeconomic and wage policy, where domestic demand plays an important role. There is room for a wage-led recovery in the global economy based on a simultaneous increase in the wage shares, where global GDP as well as all individual countries can grow. Addressing the problem of income inequality is even more important today with the background of the crisis. The crisis has now reached a stage of incomes and jobs crisis along with austerity policies. The share of wages in GDP has started to fall again since 2010 or 2011 in many countries. The consequences of this for demand may partly explain why the recovery is so weak or the recession is back in the Eurozone. The rise in inequality was one of the main causes of the ‘great recession.’ The austerity policies with further detrimental effects on the wage shares will only bring further stagnation.

Please contact the seminar organisers Philip Arestis (pa267@cam.ac.uk) and Michael Kitson (m.kitson@jbs.cam.ac.uk) in the event of a query.

This talk is part of the St Catharine's Political Economy Seminars series.

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• St Catharine's Political Economy Seminars
• The McGrath Centre, St Catharine's College

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