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Wage shares and demand regimes in Central America: an empirical analysis for Costa Rica, El Salvador, Honduras, Nicaragua, and Panama, 1970–2016

Valeria Jiménez

International Review of Applied Economics2026https://doi.org/10.1080/02692171.2026.2624625preprint
AJG 1ABDC B
Weight
0.40

Abstract

This paper analyzes the relationship between functional income distribution aggregate demand and economic growth in five Central American countries; Costa Rica, El Salvador, Honduras, Nicaragua, and Panama for the period 1970-2016. It estimates the effects of a change in the wage share on aggregate demand based on a post-Kaleckian model, which allows for either profit- or wage-led demand. The results show that the domestic demand is wage-led in the five countries. The same applies for total demand with the exception of Panama, whose domestically wage-led demand turns profit-led when including the effect of distribution on net exports. Finally, it is argued that there is room for a wage-led recovery in Central America.

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https://doi.org/https://doi.org/10.1080/02692171.2026.2624625

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@article{valeria2026,
  title        = {{Wage shares and demand regimes in Central America: an empirical analysis for Costa Rica, El Salvador, Honduras, Nicaragua, and Panama, 1970–2016}},
  author       = {Valeria Jiménez},
  journal      = {International Review of Applied Economics},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1080/02692171.2026.2624625},
}

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Evidence weight

0.40

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.25 × 0.4 = 0.10
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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