Functional distribution of income as a determinant of importing behavior: An empirical analysis

We examine the dynamic impact of functional distribution income on demand for imports in developed and developing countries. Drawing upon a motivating accounting structure suggesting potentially causal effect an extended version standard import function, we find evidence that fall wage share has statistically significant positive (negative) volume (developed) countries entire sample Therefore, neglect such effects functions represents omission both empirically relevant variable further theoretically structural channel through which affects output growth. A key implication is to be considered growth empirics based either binding balance-of-payments constraint Kaldor–Thirlwall tradition or demand-led regime approach competitive real exchange rate.