Technological Bias under Financial Repression on the Falling Labour Income Share in China

Xin Wu, Qiaoyuan Lin, Wenli Huang

Research output: Contribution to journalArticle

Abstract

This article aims to quantify the relationship between the falling low labour income share and financial repression in China and address the question of does the share simulates the financial repression or vice versa? The findings show that the falling labour income share is Granger-caused by the financial repression and yet the financial repression likely aids labour-augmenting technological improvement to some extent. In particular, the persistent falling labour income share in China are due to, firstly, the falling share is attributed to the restraints of low interest rate by financial repression policy; secondly, the speed of adjustment (i.e. -0.347, -0.150 and -0.214) by technological progress (or the efficiency of the renovation) has been lagging behind. This lagging likely leads to the share that enables to restore to the balanced income share between capital and labour.
Original languageEnglish
JournalChina Economic Review
Publication statusSubmitted - Mar 2017

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Labor income
Financial repression
China
Labor
Interest rates
Income
Technological progress
Speed of adjustment

Cite this

Wu, X., Lin, Q., & Huang, W. (2017). Technological Bias under Financial Repression on the Falling Labour Income Share in China. Manuscript submitted for publication.

Technological Bias under Financial Repression on the Falling Labour Income Share in China. / Wu, Xin; Lin, Qiaoyuan; Huang, Wenli.

In: China Economic Review, 03.2017.

Research output: Contribution to journalArticle

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