The subprime financial crisis that started in 2007 and which became the global financial crisis challenges economists and policy-makers to reconsider the theories and policies that had gradually been accepted as conventional wisdom over the last thirty years. It is widely recognized that the global financial crisis has called into question the efficiency and stability of unregulated financial markets. This chapter argues that it has also demonstrated the limitations and even falsehood of the claim that wage moderation, accompanied by more flexible labour markets as well as labour institutions and laws more favourable to employers, will ultimately make for a more stable economy and a more productive and dynamic economic system.
- Income Distribution
- Productivity Growth
- Real Wage
- Aggregate Demand
- Profit Share
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The paper was presented at a session of the Regulating for Decent Work (RDW) conference, held at the ILO, Geneva, 6–8 July 2011. We wish to thank participants for their remarks and questions — in particular, Pierre Laliberte, Eckhard Hein and Simon Sturn.
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Lavoie, M., Stockhammer, E. (2013). Wage-led Growth: Concept, Theories and Policies. In: Lavoie, M., Stockhammer, E. (eds) Wage-led Growth. Advances in Labour Studies. Palgrave Macmillan, London. https://doi.org/10.1057/9781137357939_2
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