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UK and other advanced economies productivity and income inequality

Author

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  • Philip Arestis
Abstract
The focus of this contribution is on weak productivity growth, in the UK and other advanced economies, which has been slowing down ever since around 2000, and on increasing income inequality; both of which have been caused by a number of factors, including ‘secular stagnation’. Actually, recent evidence clearly suggests that labour productivity and income inequality have been closely and significantly related; this is so since there is a strong relationship between productivity, inequality, economic growth and real wages. Productivity growth is the key determinant of how demand can grow without inflation, thereby reducing inequality of income. The slowdown in productivity growth and increase in inequality have been in evidence in the UK and other advanced economies. Indeed, they have become more pronounced following the Global Financial Crisis. It is the case that although weak productivity growth and increased income inequality predate the Global Financial Crisis, and the Great Recession, they have clearly worsened following them.

Suggested Citation

  • Philip Arestis, 2021. "UK and other advanced economies productivity and income inequality," International Review of Applied Economics, Taylor & Francis Journals, vol. 35(3-4), pages 355-370, July.
    • Handle: RePEc:taf:irapec:v:35:y:2021:i:3-4:p:355-370
    DOI: 10.1080/02692171.2020.1749243
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    References listed on IDEAS

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    1. Erling Barth & Alex Bryson & Harald Dale-Olsen, 2017. "Union Density, Productivity, and Wages," DoQSS Working Papers 17-11, Quantitative Social Science - UCL Social Research Institute, University College London.
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    3. Facundo Alvaredo & Lucas Chancel & Thomas Piketty & Emmanuel Saez & Gabriel Zucman, 2017. "Global Inequality Dynamics: New Findings from WID.world," American Economic Review, American Economic Association, vol. 107(5), pages 404-409, May.
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    5. Young Eun Kim & Norman V. Loayza, 2019. "Productivity Growth: Patterns and Determinants across the World," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 42(84), pages 36-93.
    6. repec:ilo:ilowps:470932 is not listed on IDEAS
    7. Hein, Eckhard, & Mundt, Matthias., 2012. "Financialisation and the requirements and potentials for wage-led recovery : a review focussing on the G20," ILO Working Papers 994709323402676, International Labour Organization.
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    Cited by:

    1. Block, Joern H. & Hirschmann, Mirko & Kranz, Tobias & Neuenkirch, Matthias, 2023. "Public family firms and economic inequality across societies," Journal of Business Venturing Insights, Elsevier, vol. 19(C).
    2. Maria Tsiapa, 2023. "A holistic approach of the labour productivity slowdown in the regions of the European Union," Papers in Regional Science, Wiley Blackwell, vol. 102(3), pages 507-531, June.
    3. Dorina Lazar & Cristian Marius Litan, 2024. "Inequality, Growth, and Structural Transformation: New Evidence from a Post-communist Economy," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 66(2), pages 236-260, June.

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