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Distribution, aggregate demand and productivity growth - theory and empirical results for six OECD countries based on a Post-Kaleckian model

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Author Info
Eckhard Hein () (IMK at the Hans Boeckler Foundation and Carl von Ossietzky University Oldenburg, Germany)
Artur Tarassow (University of Hamburg)

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Abstract

Empirical research based on the Bhaduri/Marglin-variant of the Kaleckian model has recently shown that aggregate demand in many medium-sized and large open economies tends to be wage-led in the medium to long run, even in a period of increasing globalisation. In this paper we extend this type of analysis and integrate the effects on productivity growth, theoretically and empirically. Productivity growth is introduced into the theoretical model making use of the Verdoorn effect or of Kaldor’s technical progress function and hence of a positive relationship between GDP or capital stock growth and productivity growth. Further on, a costpush or Marx/Hicks-effect and hence a positive impact of real wage growth or the wage share on productivity growth is taken into account. In the empirical part we estimate productivity growth equations for six countries introducing these two effects. Finally, economic policy conclusions are drawn.

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Publisher Info
Paper provided by IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute in its series IMK Working Paper with number 18-2008.

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Length: 41 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:imk:wpaper:18-2008

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Related research
Keywords: Demand-led growth; endogenous technical change; wage-led and profit-led demand regimes; productivity regime;

Find related papers by JEL classification:
E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
E25 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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