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Kaldor 3.0: An Empirical Investigation of the Verdoorn-augmented Technical Progress Function

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  • Fabrizio Antenucci
  • Matteo Deleidi
  • Walter Paternesi Meloni

Abstract

Consistent with neoclassical theory, the recent slowdown in labour productivity is generally regarded as one of the main causes of the current phase of economic stagnation. By contrast, post-Keynesian economics looks at productivity growth as positively affected by the rate of growth of output in the long run as well. By focusing on this alternative perspective, in our exploration we deal with an extended version of the Kaldorian technical progress function in which the trend growth rate of productivity is endogenously shaped by the dynamics of both output and capital−labour ratio. We empirically verify such a relationship for the total economy and the manufacturing sector through a structural vector autoregressive (SVAR) model for G7 countries (1970–2017). Our findings support the validity of a technical progress function, which admits increasing returns to scale, thus indicating that both the rate of growth of output and the process of capital intensification exert positive effects on productivity growth, even beyond the business cycle.

Suggested Citation

  • Fabrizio Antenucci & Matteo Deleidi & Walter Paternesi Meloni, 2020. "Kaldor 3.0: An Empirical Investigation of the Verdoorn-augmented Technical Progress Function," Review of Political Economy, Taylor & Francis Journals, vol. 32(1), pages 49-76, July.
    • Handle: RePEc:taf:revpoe:v:32:y:2020:i:1:p:49-76
    DOI: 10.1080/09538259.2020.1744936
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    Cited by:

    1. Alexandre Gomes, 2020. "Regional economic growth in China from a Kaldorian perspective: A comparative study of Nanjing and Suzhou," PSL Quarterly Review, Economia civile, vol. 73(295), pages 283-312.
    2. Nishi, Hiroshi, 2022. "Income distribution, technical change, and economic growth: A two-sector Kalecki–Kaldor approach," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 418-432.
    3. Stefano Di Bucchianico, 2021. "Negative Interest Rate Policy to Fight Secular Stagnation: Unfeasible, Ineffective, Irrelevant, or Inadequate?," Review of Political Economy, Taylor & Francis Journals, vol. 33(4), pages 687-710, October.
    4. Stefano Lucarelli & Gaetano Perone, 2020. "Quando la produttivitˆ limitata dalla bilancia dei pagamenti. Una riflessione sulle relazioni fra centro e periferia nellÕunione monetaria europea a partire dallÕequazione della produttivitˆ di Sylos ," Moneta e Credito, Economia civile, vol. 73(292), pages 325-353.
    5. Stirati, Antonella & Paternesi Meloni, Walter, 2021. "Unemployment and the wage share: a long-run exploration for major mature economies," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 330-352.
    6. Borsato, Andrea & Lorentz, André, 2023. "The Kaldor–Verdoorn law at the age of robots and AI," Research Policy, Elsevier, vol. 52(10).

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