Macroeconomic channels of transmission of post-pandemic recovery strategies for African economies

Figures & data

Table 1. Aggregate factors and their determinants

Aggregate factors	Determinants	Description
Private consumption	$C=C\left(W,\mathrm{\Pi }\right)$	Depends on the total wage payment $\left(W\right)$ and total profit $\left(\mathrm{\Pi }\right)$
Private investment	$I=I\left(Y,\pi ,v,C_r,R\right)$	Depends on domestic output $\left(Y\right)$, profit share $\left(\pi \right)$, business confidence $\left(v\right)$, private credit $\left(C_r\right)$, and interest rates $\left(R\right)$
Export	$X=X\left(Y_F,\pi ,e\right)$	Depends on $\pi$, foreign output $\left(Y_F\right)$, and the exchange rate $\left(e\right)$
Import	$M=M\left(\pi ,Y^{\ast },e\right)$	Depends on $\pi$, domestic output $\left(Y\right)$, an exchange rate $\left(e\right)$
Government expenditure	$G=G\left(H,O\right)$	Depends on corporate tax $\left(H\right)$ and other government revenues $\left(O\right)$

Table 2. Variables and expected sign

Variables	Proxy	Data sources	Contemporaneous expected sign
Output (Y)	Nominal GDP	WDI World Bank	N/A: Dependent variable
Y (1^st lag)	…	…	+
Foreign output (YF)	EU, China, and US nominal GDPs	WDI World Bank	+
Wage share (ω)	Wage and salaried workers (% total employment)	ILOSTAT	+
Private credit (Cr)	Domestic credit to the private sector by banks (% of GDP)	WDI World Bank	+
Interest rate (R)	Real interest rate	WDI World Bank	-
Corporate tax (H)	Tax Revenue	WDI World Bank	-
Other government revenues (O)	Other local taxes	WDI World Bank	-

Table 3. Descriptive statistics

Variable	Observation	Mean	Std. Dev.	Minimum	Maximum
Log(Y)	1,566	21.478	5.076	0.000	27.066
Log(YEU)	1,566	29.988	0.330	29.502	30.418
Log(YCHN)	1,566	28.467	1.177	26.611	30.262
Log(YUS)	1,566	30.083	0.371	29.416	30.655
Log(H)	1,566	8.805	11.531	0.000	29.253
Log(O)	1,566	5.370	8.060	0.000	21.630
Cr	1,566	16.877	16.982	0.000	106.260
ω	1,566	30.099	24.959	0.000	93.150
R	1,566	4.527	13.486	−93.513	252.115

Note: Missing values have been replaced by zeros following log transformation.

Table 4. Correlation matrix

	Log(Y)	Log(Y_1)	Log(YEU)	Log(YCHN)	Log(YUS)	Log(H)	Log(O)	Cr	ω	R
Log(Y)	1
Log(Y_1)	0.93*	1
Log(YEU)	0.19*	0.19*	1
Log(YCHN)	0.19*	0.20*	0.93*	1
Log(YUS)	0.19*	0.19*	0.92*	0.98*	1
Log(H)	0.26*	0.26*	0.27*	0.2786*	0.2619*	1
Log(O)	0.24*	0.24*	0.19*	0.2020*	0.1837*	0.88*	1
Cr	0.28*	0.29*	0.17*	0.1884*	0.1787*	0.39*	0.41*	1
ω	0.19*	0.20*	0.11*	0.1238*	0.1315*	0.18*	0.21*	0.56*	1
R	0.05*	0.06*	0.07*	0.0911*	0.1030*	0.01	0.01	0.05*	0.02	1

*p ≤ 0.05

Figure 1. Average wage share, all Africa (%) Source: authors.

Figure 2. Wage share in Africa: trends and disparities (%) Source: authors.

Table 5. Pooled OLS model

ESTIMATES	Dependent variable: Log(Y)
	[1]	[2]	[3]	[4]
${\hat{\alpha }}_{OLS}$	0.928***	0.923***	0.954***	0.997***
	(0.00886)	(0.00952)	(0.0257)	(0.0354)
${\hat{\beta }}_k$	Not reported (—)	—	—	—
Constant	—	—	—	—
Controls	No	Yes	Yes	Yes
Year dummies	No	Yes	Yes	No
Observations	1,512	1,512	1,458	1,336
R-squared	0.879	0.881	0.898	0.786

Standard errors in parentheses

*** p < 0.01, ** p < 0.05, * p < 0.1

Table 6. Within-group FE model

ESTIMATES	Dependent variable: Log(Y)
	[1]	[2]	[3]	[4]
${\hat{\alpha }}_{iFE}$	0.832***	0.816***	0.911***	0.888***
	(0.0144)	(0.0156)	(0.0268)	(0.0365)
${\hat{\beta }}_k$	Not reported (—)	—	—	—
Constant	—	—	—	—
Controls	No	Yes	Yes	Yes
Year dummies	No	Yes	Yes	No
Observations	1,512	1,512	1,458	1,336
R-squared	0.695	0.703	0.739	0.590
Number of id	54	54	54	54

Standard errors in parentheses

*** p < 0.01, ** p < 0.05, * p < 0.1

Table 7. Variables definition

Dependent variable	Predetermined variables	Endogenous variables	Exogenous variables	Instrumental variables
$log{Y}_{it}$	$log{Y}_{\begin{array}{c}i\left(t-q\right)\\ q\ge 1\end{array}}$	$log{\left(Y_F\right)}_{it}$ ${\left(C_r\right)}_{it}$ ${\omega }_{it}$	$log{H}_{it}$ $log{O}_{it}$ $R_{it}$	$log{\left(Y_F\right)}_{i\left(t-1\right)}$ ${\left(C_r\right)}_{i\left(t-1\right)}$ ${\omega }_{i\left(t-1\right)}$

Table 8. GMM-SYS, overall (Y^F = Y^EU)

VARIABLES	Dependent variable: Log(Y)
	Level GMM-SYS		Increased $y$ level GMM-SYS
	One-step	Two-step	One-step	Two-step
Log(Y_1)	0.970***	0.964***	0.955***	0.944***
	(0.0219)	(0.0268)	(0.0229)	(0.0372)
ω	0.0898**	0.101**	0.0853**	0.100***
	(0.0380)	(0.0438)	(0.0357)	(0.0362)
Log(YEU)	0.640	0.548	0.549	0.507
	(0.546)	(0.339)	(0.462)	(0.313)
FD Arellano-Bond AR (1), $P\left(z\right)$	0.033	0.037	0.034	0.039
FD Arellano-Bond AR (2), $P\left(z\right)$	0.488	0.494	0.559	0.613
Sargan overid. restr, $P\left({\chi }^2\right)$	0.605	0.605	0.452	0.452
Hansen overid. restr, $P\left({\chi }^2\right)$	0.108	0.108	0.118	0.118
Number of instruments	34	34	34	34
Observations	1,458	1,458	864	540
Number of group	54	54	54	54

Note: Robust standard errors in parentheses *** p < 0.01, ** p < 0.05, * p < 0.1

Table 9. GMM-SYS, overall (Y_F = Y_CHN)

VARIABLES	Dependent variable: Log(Y)
	Level GMM-SYS		Increased $y$ level GMM-SYS
	One-step	Two-step	One-step	Two-step
Log(Y_1)	0.939***	0.949***	0.905***	0.901***
	(0.0377)	(0.0245)	(0.0365)	(0.0400)
ω	0.125*	0.123**	0.110*	0.127*
	(0.0721)	(0.0585)	(0.0623)	(0.0702)
Log(YCHN)	1.189	0.811	1.467	0.781
	(0.748)	(0.597)	(0.908)	(0.773)
FD Arellano-Bond AR (1), $P\left(z\right)$	0.031	0.034	0.030	0.036
FD Arellano-Bond AR (2), $P\left(z\right)$	0.639	0.329	0.766	0.990
Sargan overid. restr, $P\left({\chi }^2\right)$	0.538	0.532	0.494	0.494
Hansen overid. restr, $P\left({\chi }^2\right)$	0.080	0.158	0.231	0.231
Number of instruments	35	34	34	34
Observations	1,458	1,458	1404	1404
Number of group	54	54	54	54

Note: Robust standard errors in parentheses *** p < 0.01, ** p < 0.05, * p < 0.1

Table 10. GMM-SYS, overall (Y_F = Y_US)

VARIABLES	Dependent variable: Log(Y)
	Level GMM-SYS		Increased $y$ level GMM-SYS
	One-step	Two-step	One-step	Two-step
Log(Y_1)	0.965***	0.959***	0.961***	0.950***
	(0.0247)	(0.0382)	(0.0332)	(0.0481)
ω	0.0935**	0.123*	0.0903*	0.124
	(0.0446)	(0.0657)	(0.0528)	(0.0759)
Log(YUS)	−1.355	−0.370	−2.134	−0.662
	(4.401)	(2.333)	(4.659)	(2.273)
FD Arellano-Bond AR (1), $P\left(z\right)$	0.027	0.032	0.026	0.035
FD Arellano-Bond AR (2), $P\left(z\right)$	0.997	0.897	0.635	0.992
Sargan overid. restr, $P\left({\chi }^2\right)$	0.552	0.552	0.483	0.483
Hansen overid. restr, $P\left({\chi }^2\right)$	0.047	0.047	0.109	0.109
Number of instruments	34	34	34	34
Observations	1,458	1,458	1404	1404
Number of group	54	54	54	54

Note: Robust standard errors in parentheses *** p < 0.01, ** p < 0.05, * p < 0.1

Table 11. GMM-SYS, Sub-Saharan Africa (Y_F = Y_EU)

VARIABLES	Dependent variable: Log(Y)
	Level GMM-SYS		Increased $y$ level GMM-SYS
	One-step	Two-step	One-step	Two-step
Log(Y_1)	0.978***	0.974***	0.961***	0.953***
	(0.0179)	(0.0207)	(0.0177)	(0.0263)
ω	0.169**	0.138	0.158**	0.120*
	(0.0780)	(0.0859)	(0.0711)	(0.0700)
Log(YEU)	0.934*	0.825*	0.877*	0.769**
	(0.546)	(0.466)	(0.449)	(0.339)
FD Arellano-Bond AR (1), $P\left(z\right)$	0.039	0.040	0.039	0.040
FD Arellano-Bond AR (2), $P\left(z\right)$	0.408	0.341	0.364	0.359
Sargan overid. restr, $P\left({\chi }^2\right)$	0.747	0.747	0.611	0.611
Hansen overid. restr, $P\left({\chi }^2\right)$	0.088	0.088	0.110	0.110
Number of instruments	34	34	34	34
Observations	1,296	1,296	1,248	1,248
Number of group	48	48	48	48

Note: Robust standard errors in parentheses *** p < 0.01, ** p < 0.05, * p < 0.1

Table 12. GMM-SYS, Sub-Saharan Africa (YF = YCHN)

VARIABLES	Dependent variable: Log(Y)
	Level GMM-SYS		Increased $y$ level GMM-SYS
	One-step	Two-step	One-step	Two-step
Log(Y_1)	0.946***	0.959***	0.913***	0.909***
	(0.0364)	(0.0162)	(0.0315)	(0.0303)
ω	0.232	0.180*	0.178*	0.141
	(0.148)	(0.104)	(0.101)	(0.0952)
Log(YCHN)	1.231	0.830	1.527	0.771
	(0.938)	(0.849)	(1.105)	(0.876)
FD Arellano-Bond AR (1), $P\left(z\right)$	0.037	0.037	0.036	0.040
FD Arellano-Bond AR (2), $P\left(z\right)$	0.699	0.376	0.432	0.945
Sargan overid. restr, $P\left({\chi }^2\right)$	0.530	0.526	0.445	0.445
Hansen overid. restr, $P\left({\chi }^2\right)$	0.125	0.109	0.130	0.130
Number of instruments	35	34	34	34
Observations	1,296	1,296	1,248	1,248
Number of group	48	48	48	48

Note: Robust standard errors in parentheses *** p < 0.01, ** p < 0.05, * p < 0.1

Table 13. GMM-SYS, Sub-Saharan Africa (YF = YUS)

VARIABLES	Dependent variable: Log(Y)
	Level GMM-SYS		Increased $y$ level GMM-SYS
	One-step	Two-step	One-step	Two-step
Log(Y_1)	0.968***	0.957***	0.963***	0.949***
	(0.0218)	(0.0291)	(0.0315)	(0.0371)
ω	0.161*	0.166	0.163	0.136
	(0.0872)	(0.0998)	(0.106)	(0.0836)
Log(YUS)	−0.663	−0.156	−1.441	−0.349
	(4.005)	(3.328)	(4.436)	(3.672)
FD Arellano-Bond AR (1), $P\left(z\right)$	0.036	0.040	0.034	0.044
FD Arellano-Bond AR (2), $P\left(z\right)$	0.999	0.361	0.607	0.569
Sargan overid. restr, $P\left({\chi }^2\right)$	0.566	0.566	0.480	0.480
Hansen overid. restr, $P\left({\chi }^2\right)$	0.102	0.102	0.209	0.209
Number of instruments	34	34	34	34
Observations	1,296	1,296	1,248	1,248
Number of group	48	48	48	48

Note: Robust standard errors in parentheses *** p < 0.01, ** p < 0.05, * p < 0.1

Table 14. GMM-SYS, pre/post-2008 crisis periods

VARIABLES	Dependent variable: Log(Y)
	Level GMM-SYS		Increased $y$ level GMM-SYS
	One-step	Two-step	One-step	Two-step
	Pre-2008 crisis period		Post-2008 crisis period
Log(Y_1)	0.887***	0.806***	1.011***	1.010***
	(0.0941)	(0.212)	(0.0440)	(0.0425)
ω	0.184*	0.213	0.0642	0.0528
	(0.108)	(0.157)	(0.231)	(0.353)
Log(YEU)	0.312	0.424**	1.856*	1.169
	(0.304)	(0.169)	(0.993)	(1.346)
FD Arellano-Bond AR (1), $P\left(z\right)$	0.119	0.156	0.037	0.067
FD Arellano-Bond AR (2), $P\left(z\right)$	0.791	0.917	0.798	0.907
Sargan overid. restr, $P\left({\chi }^2\right)$	0.946	0.946	0.000	0.000
Hansen overid. restr, $P\left({\chi }^2\right)$	0.025	0.025	0.110	0.687
Number of instruments	23	23	34	34
Observations	864	864	540	540
Number of group	54	54	54	54

Note: Robust standard errors in parentheses *** p < 0.01, ** p < 0.05, * p < 0.1

Table 15. Long-run coefficients

Variables	Coefficients		P>|z|
	Overall	SSA	Overall	SSA
ω	1.795	2.552	0.163	0.222
Log(YEU)	N/A	16.358*	N/A	0.093

*** p < 0.01, ** p < 0.05, * p < 0.1

Figure 3. Changes in income distribution and State policy tools for regimes viability.

Source: Author’s chart based on the description in Lavoie and Stockhammer (2013)

Figure 4. Trend in wage share, Benin (%) Source: authors.

Table

	Country	Sub-Saharan Africa
1	Angola	X
2	Burundi	X
3	Benin	X
4	Burkina Faso	X
5	Botswana	X
6	Central African Rep.	X
7	Côte d’Ivoire	X
8	Cameroon	X
9	Congo, Dem. Rep. of the	X
10	Congo, Rep. of	X
11	Cabo Verde	X
12	Comoros, Union of the	X
13	Djibouti	X
14	Algeria
15	Egypt, Arab Rep. of
16	Eritrea, The State of	X
17	Ethiopia, The Federal Dem. Rep. of	X
18	Gabon	X
19	Ghana	X
20	Guinea	X
21	Gambia, The	X
22	Guinea-Bissau	X
23	Equatorial Guinea, Rep. of	X
24	Kenya	X
25	Liberia	X
26	Libya
27	Lesotho, Kingdom of	X
28	Morocco
29	Madagascar, Rep. of	X
30	Mali	X
31	Mozambique, Rep. of	X
32	Mauritania, Islamic Rep. of	X
33	Mauritius	X
34	Malawi	X
35	Namibia	X
36	Niger	X
37	Nigeria	X
38	Rwanda	X
39	Sudan	X
40	Senegal	X
41	Sierra Leone	X
42	Somalia	X
43	South Sudan, Rep. of	X
44	São Tomé and Príncipe, Dem. Rep. of	X
45	Eswatini, Kingdom of	X
46	Seychelles	X
47	Chad	X
48	Togo	X
49	Tunisia
50	Tanzania, United Rep. of	X
51	Uganda	X
52	South Africa	X
53	Zambia	X
54	Zimbabwe	X

Table

VARIABLES	Dependent variable: Log(Y)
	Level GMM-SYS		Increased $y$ level GMM-SYS
	One-step	Two-step	One-step	Two-step
Log(Y_1)	0.970***	0.964***	0.955***	0.944***
	(0.0219)	(0.0268)	(0.0229)	(0.0372)
Log(Y_2)	−0.00728	−0.00296	−0.00291	−0.00288
	(0.00928)	(0.0104)	(0.00947)	(0.0112)
Log(Y_3)			−0.00946	−0.00816
			(0.0202)	(0.0130)
Log(YEU)	0.640	0.548	0.549	0.507
	(0.546)	(0.339)	(0.462)	(0.313)
Log(YEU_1)	−0.614	−0.521	−0.511	−0.462
	(0.557)	(0.349)	(0.453)	(0.302)
Cr	0.0234	0.0165	0.0349	0.0241
	(0.0171)	(0.0158)	(0.0222)	(0.0159)
Cr_1	−0.0292	−0.0190	−0.0382*	−0.0255
	(0.0190)	(0.0164)	(0.0222)	(0.0160)
ω	0.0898**	0.101**	0.0853**	0.100***
	(0.0380)	(0.0438)	(0.0357)	(0.0362)
ω_1	−0.0872**	−0.0990**	−0.0821**	−0.0981***
	(0.0378)	(0.0439)	(0.0356)	(0.0364)
R	0.0143	0.00736	0.0148	0.00785
	(0.0229)	(0.00925)	(0.0234)	(0.00978)
R_1	0.00733	0.00661	0.00439	0.00408
	(0.0185)	(0.0135)	(0.0220)	(0.0177)
Log(H)	−0.110	−0.0491	−0.0987	−0.0418
	(0.121)	(0.0623)	(0.122)	(0.0721)
Log(H_1)	0.101	0.0629	0.0985	0.0527
	(0.105)	(0.0638)	(0.110)	(0.0678)
Log(O)	0.172	0.0770	0.149	0.0716
	(0.196)	(0.101)	(0.196)	(0.113)
Log(O_1)	−0.160	−0.0981	−0.153	−0.0847
	(0.144)	(0.0926)	(0.149)	(0.103)
FD Arellano-Bond AR (1), $P\left(z\right)$	0.033	0.037	0.034	0.039
FD Arellano-Bond AR (2), $P\left(z\right)$	0.488	0.494	0.559	0.613
Sargan overid. restr, $P\left({\chi }^2\right)$	0.605	0.605	0.452	0.452
Hansen overid. restr, $P\left({\chi }^2\right)$	0.108	0.108	0.118	0.118
Number of instruments	34	34	34	34
Observations	1,458	1,458	864	540
Number of group	54	54	54	54

Table

VARIABLES	Dependent variable: Log(Y)
	Level GMM-SYS		Increased $y$ level GMM-SYS
	One-step	Two-step	One-step	Two-step
Log(Y_1)	0.939***	0.949***	0.905***	0.901***
	(0.0377)	(0.0245)	(0.0365)	(0.0400)
Log(Y_2)	−0.0246	−0.0119	−0.00799	−0.00552
	(0.0224)	(0.0227)	(0.00880)	(0.0117)
Log(Y_3)			−0.0298	−0.0226
			(0.0408)	(0.0288)
Log(YCHN)	1.189	0.811	1.467	0.781
	(0.748)	(0.597)	(0.908)	(0.773)
Log(YCHN_1)	−1.190	−0.767	−1.378	−0.689
	(0.795)	(0.583)	(0.873)	(0.750)
Cr	0.0241	0.0197	0.0421	0.0273
	(0.0251)	(0.0180)	(0.0270)	(0.0188)
Cr_1	−0.0293	−0.0214	−0.0380	−0.0261
	(0.0186)	(0.0142)	(0.0235)	(0.0176)
ω	0.125*	0.123**	0.110*	0.127*
	(0.0721)	(0.0585)	(0.0623)	(0.0702)
ω_1	−0.122*	−0.121**	−0.106*	−0.125*
	(0.0715)	(0.0591)	(0.0624)	(0.0706)
R	0.0237	0.00599	0.0240	0.00573
	(0.0231)	(0.00817)	(0.0257)	(0.00924)
R_1	0.0159	0.00354	0.00985	0.00206
	(0.0197)	(0.0113)	(0.0199)	(0.0165)
Log(H)	−0.136	−0.0559	−0.137	−0.0580
	(0.111)	(0.0680)	(0.101)	(0.0598)
Log(H_1)	0.115	0.0422	0.0823	0.0216
	(0.0878)	(0.0613)	(0.0999)	(0.0638)
Log(O)	0.218	0.105	0.202	0.104
	(0.184)	(0.141)	(0.176)	(0.107)
Log(O_1)	−0.176	−0.0839	−0.144	−0.0515
	(0.115)	(0.0972)	(0.119)	(0.0991)
FD Arellano-Bond AR (1), $P\left(z\right)$	0.031	0.034	0.030	0.036
FD Arellano-Bond AR (2), $P\left(z\right)$	0.639	0.329	0.766	0.990
Sargan overid. restr, $P\left({\chi }^2\right)$	0.538	0.532	0.494	0.494
Hansen overid. restr, $P\left({\chi }^2\right)$	0.080	0.158	0.231	0.231
Number of instruments	35	34	34	34
Observations	1,458	1,458	1404	1404
Number of group	54	54	54	54

Table

VARIABLES	Dependent variable: Log(Y)
	Level GMM-SYS		Increased $y$ level GMM-SYS
	One-step	Two-step	One-step	Two-step
Log(Y_1)	0.965***	0.959***	0.961***	0.950***
	(0.0247)	(0.0382)	(0.0332)	(0.0481)
Log(Y_2)	−0.0116	−0.00883	−0.00612	−0.00606
	(0.0146)	(0.0173)	(0.0172)	(0.0155)
Log(Y_3)			−0.00605	−0.00438
			(0.0136)	(0.00776)
Log(YUS)	−1.355	−0.370	−2.134	−0.662
	(4.401)	(2.333)	(4.659)	(2.273)
Log(YUS_1)	1.391	0.406	2.172	0.705
	(4.416)	(2.340)	(4.678)	(2.290)
Cr	0.0257	0.0152	0.0383	0.0228
	(0.0210)	(0.0168)	(0.0240)	(0.0160)
Cr_1	−0.0278	−0.0166	−0.0402*	−0.0252
	(0.0181)	(0.0165)	(0.0236)	(0.0169)
ω	0.0935**	0.123*	0.0903*	0.124
	(0.0446)	(0.0657)	(0.0528)	(0.0759)
ω_1	−0.0910**	−0.122*	−0.0873	−0.122
	(0.0447)	(0.0663)	(0.0528)	(0.0772)
R	0.00440	0.000251	0.00763	0.00147
	(0.0175)	(0.0165)	(0.0195)	(0.0112)
R_1	0.0165	0.0111	0.0201	0.00794
	(0.0360)	(0.0199)	(0.0423)	(0.0239)
Log(H)	−0.145	−0.0921	−0.150	−0.0756
	(0.170)	(0.142)	(0.180)	(0.138)
Log(H_1)	0.136	0.0956	0.144	0.0797
	(0.106)	(0.131)	(0.118)	(0.128)
Log(O)	0.210	0.150	0.203	0.125
	(0.235)	(0.235)	(0.242)	(0.208)
Log(O_1)	−0.214*	−0.160	−0.210*	−0.128
	(0.109)	(0.210)	(0.124)	(0.203)
FD Arellano-Bond AR (1), $P\left(z\right)$	0.027	0.032	0.026	0.035
FD Arellano-Bond AR (2), $P\left(z\right)$	0.997	0.897	0.635	0.992
Sargan overid. restr, $P\left({\chi }^2\right)$	0.552	0.552	0.483	0.483
Hansen overid. restr, $P\left({\chi }^2\right)$	0.047	0.047	0.109	0.109
Number of instruments	34	34	34	34
Observations	1,458	1,458	1404	1404
Number of group	54	54	54	54

Table

VARIABLES	Dependent variable: Log(Y)
	Level GMM-SYS		Increased $y$ level GMM-SYS
	One-step	Two-step	One-step	Two-step
Log(Y_1)	0.978***	0.974***	0.961***	0.953***
	(0.0179)	(0.0207)	(0.0177)	(0.0263)
Log(Y_2)	−0.00566	−0.00264	−0.00162	−0.000648
	(0.00843)	(0.00924)	(0.00578)	(0.00628)
Log(Y_3)			−0.0114	−0.0100
			(0.0180)	(0.0143)
Log(YEU)	0.934*	0.825*	0.877*	0.769**
	(0.546)	(0.466)	(0.449)	(0.339)
Log(YEU_1)	−0.917	−0.806*	−0.843*	−0.731**
	(0.556)	(0.471)	(0.438)	(0.326)
Cr	0.0259	0.0209	0.0354	0.0289
	(0.0168)	(0.0148)	(0.0240)	(0.0216)
Cr_1	−0.0330	−0.0248	−0.0392	−0.0313
	(0.0199)	(0.0152)	(0.0241)	(0.0206)
ω	0.169**	0.138	0.158**	0.120*
	(0.0780)	(0.0859)	(0.0711)	(0.0700)
ω_1	−0.168**	−0.136	−0.157**	−0.118*
	(0.0779)	(0.0861)	(0.0708)	(0.0703)
R	0.0101	0.00620	0.0110	0.0118
	(0.0156)	(0.0110)	(0.0166)	(0.0154)
R_1	0.00460	0.00332	−0.00160	−0.00333
	(0.0123)	(0.00930)	(0.0149)	(0.00966)
Log(H)	−0.0434	−0.0117	−0.0275	0.00346
	(0.0921)	(0.0529)	(0.0903)	(0.0389)
Log(H_1)	0.0411	0.0192	0.0310	0.0188
	(0.0840)	(0.0659)	(0.0870)	(0.0504)
Log(O)	0.0129	−0.0100	−0.0173	−0.0302
	(0.101)	(0.0756)	(0.0911)	(0.0514)
Log(O_1)	0.00948	0.00505	0.0289	0.00456
	(0.0730)	(0.0784)	(0.0776)	(0.0573)
FD Arellano-Bond AR (1), $P\left(z\right)$	0.039	0.040	0.039	0.040
FD Arellano-Bond AR (2), $P\left(z\right)$	0.408	0.341	0.364	0.359
Sargan overid. restr, $P\left({\chi }^2\right)$	0.747	0.747	0.611	0.611
Hansen overid. restr, $P\left({\chi }^2\right)$	0.088	0.088	0.110	0.110
Number of instruments	34	34	34	34
Observations	1,296	1,296	1,248	1,248
Number of group	48	48	48	48

Table

VARIABLES	Dependent variable: Log(Y)
	Level GMM-SYS		Increased $y$ level GMM-SYS
	One-step	Two-step	One-step	Two-step
Log(Y_1)	0.946***	0.959***	0.913***	0.909***
	(0.0364)	(0.0162)	(0.0315)	(0.0303)
Log(Y_2)	−0.0276	−0.0127	−0.00856	−0.00395
	(0.0198)	(0.0180)	(0.00618)	(0.00528)
Log(Y_3)			−0.0324	−0.0241
			(0.0357)	(0.0280)
Log(YCHN)	1.231	0.830	1.527	0.771
	(0.938)	(0.849)	(1.105)	(0.876)
Log(YCHN_1)	−1.267	−0.792	−1.442	−0.684
	(1.030)	(0.840)	(1.075)	(0.842)
Cr	0.0273	0.0109	0.0428	0.0188
	(0.0248)	(0.0170)	(0.0272)	(0.0134)
Cr_1	−0.0341*	−0.0173	−0.0373	−0.0158
	(0.0200)	(0.0114)	(0.0260)	(0.0119)
ω	0.232	0.180*	0.178*	0.141
	(0.148)	(0.104)	(0.101)	(0.0952)
ω_1	−0.232	−0.179*	−0.178*	−0.142
	(0.149)	(0.105)	(0.101)	(0.0962)
R	0.0154	0.00211	0.0138	0.00233
	(0.0173)	(0.00825)	(0.0155)	(0.00972)
R_1	0.0200	0.00478	0.00731	−0.00351
	(0.0182)	(0.00709)	(0.0156)	(0.00658)
Log(H)	−0.0867	−0.0594	−0.0744	−0.0126
	(0.0915)	(0.0627)	(0.0780)	(0.0421)
Log(H_1)	0.0680	0.0452	0.0238	0.0244
	(0.0670)	(0.0805)	(0.0855)	(0.0628)
Log(O)	0.111	0.0864	0.0652	0.0111
	(0.119)	(0.111)	(0.0865)	(0.0671)
Log(O_1)	−0.0369	−0.0520	0.0123	−0.0319
	(0.0676)	(0.118)	(0.0821)	(0.0915)
FD Arellano-Bond AR (1), $P\left(z\right)$	0.037	0.037	0.036	0.040
FD Arellano-Bond AR (2), $P\left(z\right)$	0.699	0.376	0.432	0.945
Sargan overid. restr, $P\left({\chi }^2\right)$	0.530	0.526	0.445	0.445
Hansen overid. restr, $P\left({\chi }^2\right)$	0.125	0.109	0.130	0.130
Number of instruments	35	34	34	34
Observations	1,296	1,296	1,248	1,248
Number of group	48	48	48	48

Table

VARIABLES	Dependent variable: Log(Y)
	Level GMM-SYS		Increased $y$ level GMM-SYS
	One-step	Two-step	One-step	Two-step
Log(Y_1)	0.968***	0.957***	0.963***	0.949***
	(0.0218)	(0.0291)	(0.0315)	(0.0371)
Log(Y_2)	−0.0124	−0.00787	−0.00543	−0.00343
	(0.0144)	(0.0119)	(0.0139)	(0.0105)
Log(Y_3)			−0.00858	−0.00510
			(0.0119)	(0.00849)
Log(YUS)	−0.663	−0.156	−1.441	−0.349
	(4.005)	(3.328)	(4.436)	(3.672)
Log(YUS_1)	0.695	0.193	1.477	0.392
	(4.019)	(3.342)	(4.453)	(3.692)
Cr	0.0302	0.0195	0.0404	0.0198
	(0.0198)	(0.0196)	(0.0264)	(0.0165)
Cr_1	−0.0326	−0.0211	−0.0426	−0.0207
	(0.0202)	(0.0177)	(0.0270)	(0.0164)
ω	0.161*	0.166	0.163	0.136
	(0.0872)	(0.0998)	(0.106)	(0.0836)
ω_1	−0.160*	−0.165	−0.162	−0.134
	(0.0875)	(0.102)	(0.107)	(0.0851)
R	0.000804	0.00182	0.00370	0.000589
	(0.0114)	(0.00992)	(0.0134)	(0.00631)
R_1	0.0143	0.00288	0.0154	−0.00330
	(0.0307)	(0.00952)	(0.0369)	(0.0115)
Log(H)	−0.0730	−0.0406	−0.0752	−0.00866
	(0.142)	(0.0709)	(0.150)	(0.0669)
Log(H_1)	0.0833	0.0679	0.0834	0.0404
	(0.0854)	(0.0602)	(0.0922)	(0.0551)
Log(O)	0.0532	0.0389	0.0429	0.00356
	(0.145)	(0.132)	(0.147)	(0.119)
Log(O_1)	−0.0674	−0.0792	−0.0520	−0.0471
	(0.0553)	(0.0957)	(0.0651)	(0.0915)
FD Arellano-Bond AR (1), $P\left(z\right)$	0.036	0.040	0.034	0.044
FD Arellano-Bond AR (2), $P\left(z\right)$	0.999	0.361	0.607	0.569
Sargan overid. restr, $P\left({\chi }^2\right)$	0.566	0.566	0.480	0.480
Hansen overid. restr, $P\left({\chi }^2\right)$	0.102	0.102	0.209	0.209
Number of instruments	34	34	34	34
Observations	1,296	1,296	1,248	1,248
Number of group	48	48	48	48

Table

VARIABLES	Dependent variable: Log(Y)
	Level GMM-SYS		Increased $y$ level GMM-SYS
	One-step	Two-step	One-step	Two-step
	Pre-2008 crisis period		Post-2008 crisis period
Log(Y_1)	0.887***	0.806***	1.011***	1.010***
	(0.0941)	(0.212)	(0.0440)	(0.0425)
Log(Y_2)	−0.0245	−0.00837	−0.00104	−0.00113
	(0.0253)	(0.0200)	(0.00476)	(0.00542)
Log(Y_3)			0.00374	0.00512
			(0.0358)	(0.0335)
Log(YEU)	0.312	0.424**	1.856*	1.169
	(0.304)	(0.169)	(0.993)	(1.346)
Log(YEU_1)	−0.223	−0.290	−1.873*	−1.188
	(0.324)	(0.226)	(1.005)	(1.339)
Cr	0.0134	0.0103	0.0606	0.0288
	(0.0107)	(0.0179)	(0.0767)	(0.0424)
Cr_1	−0.00602	−0.00144	−0.0502	−0.0255
	(0.00616)	(0.0123)	(0.0843)	(0.0544)
ω	0.184*	0.213	0.0642	0.0528
	(0.108)	(0.157)	(0.231)	(0.353)
ω_1	−0.182*	−0.213	−0.0618	−0.0478
	(0.108)	(0.159)	(0.233)	(0.354)
R	0.00792	0.0104	0.0692**	0.0693**
	(0.00718)	(0.0102)	(0.0275)	(0.0265)
R_1	0.00719	0.00239	0.0772***	0.0769***
	(0.00567)	(0.00694)	(0.0259)	(0.0254)
Log(H)	0.0239	0.0476	−0.150	−0.131
	(0.0350)	(0.0356)	(0.191)	(0.144)
Log(H_1)	0.0154	−0.0223	0.0740	0.0624
	(0.0427)	(0.0464)	(0.138)	(0.107)
Log(O)	−0.0422	−0.0451	0.224	0.214
	(0.0440)	(0.0396)	(0.344)	(0.259)
Log(O_1)	−0.00528	0.0400	−0.222	−0.185
	(0.0622)	(0.0662)	(0.226)	(0.192)
FD Arellano-Bond AR (1), $P\left(z\right)$	0.119	0.156	0.037	0.067
FD Arellano-Bond AR (2), $P\left(z\right)$	0.791	0.917	0.798	0.907
Sargan overid. restr, $P\left({\chi }^2\right)$	0.946	0.946	0.000	0.000
Hansen overid. restr, $P\left({\chi }^2\right)$	0.025	0.025	0.110	0.687
Number of instruments	23	23	34	34
Observations	864	864	540	540
Number of group	54	54	54	54

Lavoie, M., & Stockhammer, E. (2013). Wage-led growth: Concept, theories and policies. In M. Lavoie & E. Stockhammer. (Eds.), Wage-led Growth. Advances in Labour Studies (pp. 13–39). Palgrave Macmillan. https://doi.org/10.1057/9781137357939_2

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