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Cycles of demand and distribution and monetary policy in the U.S. economy

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  • Armon Rezai

Abstract

The role of monetary policy in the cyclical behavior of the labor share and capacity utilization in the U.S. economy is studied empirically. Previous estimation results remain robust; the inclusion of the rate of interest does not alter the underlying specification of the distributive demand regime. The role of monetary policy in net borrowing flows for four institutional sectors is analyzed. Interest rate effects appear most important for households. Based on this finding, implications for countercyclical stabilization policy are spelled out.

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  • Armon Rezai, 2013. "Cycles of demand and distribution and monetary policy in the U.S. economy," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 36(2), pages 231-250.
    • Handle: RePEc:mes:postke:v:36:y:2013:i:2:p:231-250
    DOI: 10.2753/PKE0160-3477360203
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    References listed on IDEAS

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    Cited by:

    1. Marcio Santetti, 2023. "A time-varying finance-led model for U.S. business cycles," Papers 2310.05153, arXiv.org, revised Jan 2024.
    2. Jose Barrales‐Ruiz & Ivan Mendieta‐Muñoz & Codrina Rada & Daniele Tavani & Rudiger von Arnim, 2022. "The distributive cycle: Evidence and current debates," Journal of Economic Surveys, Wiley Blackwell, vol. 36(2), pages 468-503, April.
    3. Laura Carvalho & Armon Rezai, 2016. "Personal income inequality and aggregate demand," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 40(2), pages 491-505.

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