| Abstract [eng] |
In recent decades, there have been considerable changes in functional income distribution. The decrease in the wage share and the increase in profit share in national income, the causes and consequences thereof have become the subject of both scientific research and political debate. The national income of any country consists of two production factors – labor and capital. Such distribution of income is called functional. The impact of functional income distribution on aggregate demand is not obvious and simple. It can manifest itself directly and through various interrelated economic, social, and political relations. It depends on the components of aggregate demand in the general domestic product. The goal of the study – after an analysis of the theoretical aspects of functional income distribution impact on aggregate demand and the preparation of an assessment model and empirical research methodology, to perform an assessment of the impact of functional income distribution on aggregate demand in the Baltic countries, taking into account the aggregate demand components’ share in GDP. The impact of functional income distribution on aggregate demand is studied using data from three Baltic countries – Lithuania, Latvia, and Estonia. The study period is 1995Q1 to 2020Q3. It can be concluded that although the Baltic countries are similar on the economic plane, taking into account the structural characteristics of the economy, the impact of functional income distribution on aggregate demand is different in these countries. |
