Exercise 3. The income distribution in the small open economy As stated in this chapter, in any period t, the share of labour income in GOP, w,/y, is equal to V'1 -a., while the share of income earned on domestic capital in GOP, rk,/y,, is a.. These features are unchanged from the model for the closed economy of Chapter 3. However, from the point of view of the small open economy the income shares of the resources owned by domestic residents in national income (rather than GOP) are of more interest. That is, the income distribution is more relevantly described by the share of labour income in national income, w,/y7, and the share of income earned on national wealth in national income, rv,/y7.