Distribution and Growth: A Dynamic Kaleckian Approach
AbstractThis paper studies the effects of an (exogenous) increase of nominal wages on profits, output, and growth. Inspired by an article by Michal Kalecki (1991), who concentrated on the effects on total profits, the paper develops a model that explicitly considers the dynamics of demand, prices, profits, and investment. The outcomes of the initial wage rise are found to be path dependent and crucially affected by the firms' initial response to an increase in demand and a decrease in profit margins. The present model, which relates to other Post Keynesian/Kaleckian contributions, can offer an alternative to the mainstream approach to analyzing the effects of wage increases.
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Bibliographic InfoPaper provided by Levy Economics Institute in its series Economics Working Paper Archive with number wp_697.
Date of creation: Nov 2011
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Distributional Changes; Disequilibrium; Investment; Growth;
Find related papers by JEL classification:
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Harcourt,G. C., 2008.
"The Structure of Post-Keynesian Economics,"
Cambridge University Press, number 9780521067539, October.
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- Amendola, Mario & Gaffard, Jean-Luc, 1998. "Out of Equilibrium," OUP Catalogue, Oxford University Press, number 9780198293804.
- Bhaduri, Amit & Marglin, Stephen, 1990. "Unemployment and the Real Wage: The Economic Basis for Contesting Political Ideologies," Cambridge Journal of Economics, Oxford University Press, vol. 14(4), pages 375-93, December.
- Claudio Sardoni, 2011. "Incomes policies: Two approaches," European Journal of Economics and Economic Policies: Intervention, Edward Elgar, vol. 8(1), pages 147-163.
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