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Is the long-run equilibrium wage-led or profit-led? A Kaleckian approach

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  • Sasaki, Hiroaki
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    Abstract

    This paper presents a Kaleckian growth model in which (i) the rate of capacity utilization, the profit share, and the rate of employment are adjusted in the medium run, and (ii) the normal rate of capacity utilization and the expected rate of growth are adjusted in the long run. Both the Kalecki-type and the Marglin–Bhaduri-type investment functions are introduced. Using the model, we examine which regime is obtained in the long-run equilibrium, the wage-led growth regime or the profit-led growth regime.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0954349X12000185
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    Bibliographic Info

    Article provided by Elsevier in its journal Structural Change and Economic Dynamics.

    Volume (Year): 23 (2012)
    Issue (Month): 3 ()
    Pages: 231-244

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    Handle: RePEc:eee:streco:v:23:y:2012:i:3:p:231-244

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    Web page: http://www.elsevier.com/locate/inca/525148

    Related research

    Keywords: Kaleckian model; Long-run equilibrium; Wage-led growth; Profit-led growth;

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    Cited by:
    1. Sasaki, Hiroaki & Matsuyama, Jun & Sako, Kazumitsu, 2013. "The macroeconomic effects of the wage gap between regular and non-regular employment and of minimum wages," Structural Change and Economic Dynamics, Elsevier, vol. 26(C), pages 61-72.

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