Partial identification for growth regimes: The case of Latin American countries

Abstract

AbstractThis study introduces the partial identification of the structural vector autoregressive model to estimate the effect of income distribution on output. For this purpose, this study follows the Post‐Keynesian growth models and identifies the demand regimes in Latin American countries for the period 1960–2014. The main results reveal that Bolivia, Colombia, Honduras, and Panama have profit‐led regimes. In addition, Costa Rica, Nicaragua, Peru, and Uruguay have wage‐led regimes. The regimes of Brazil, Chile, Ecuador, and Mexico could not be determined.