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A Dynamic Analysis of Demand and Productivity Growth in a Two-sector Kaleckian Model

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  • Nishi, Hiroshi

Abstract

This study extends a two-sector Kaleckian model of growth and income distribution by incorporating the dynamics of labour productivity growth. The economy is composed of investment goods and consumption goods producing sectors, with the sectoral demand and productivity growth interaction dynamically formalized. The study analyses the conditions for the cyclical demand and productivity growth phenomena in a two-sector economy. The model reveals that each sector may present a different response in capacity utilization rate to a change in sectoral income distribution. These phenomena are specific to two-sector models, and cannot be observed with a conventional aggregate growth model.

Suggested Citation

  • Nishi, Hiroshi, 2018. "A Dynamic Analysis of Demand and Productivity Growth in a Two-sector Kaleckian Model," MPRA Paper 86778, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:86778
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    File URL: https://mpra.ub.uni-muenchen.de/86778/1/MPRA_paper_86778.pdf
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    References listed on IDEAS

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    4. Ozlem Onaran & Thomas Obst, 2016. "Wage-led growth in the EU15 member-states: the effects of income distribution on growth, investment, trade balance and inflation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 40(6), pages 1517-1551.
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    8. Marc Lavoie & Stockhammer Engelbert, 2013. "Wage-Led Growth: An Equitable Strategy for Economic Recovery," Post-Print hal-01343664, HAL.
    9. Reiner Franke, 2000. "Optimal Utilization of Capital and a Financial Sector in a Classical Gravitation Process," Metroeconomica, Wiley Blackwell, vol. 51(1), pages 40-66, February.
    10. Engelbert Stockhammer, 2017. "Wage-led versus profit-led demand: what have we learned? A Kaleckian–Minskyan view," Review of Keynesian Economics, Edward Elgar Publishing, vol. 5(1), pages 25-42, January.
    11. Taylor, Lance, 1985. "A Stagnationist Model of Economic Growth," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 9(4), pages 383-403, December.
    12. Hiroaki Sasaki & Ryunosuke Sonoda & Shinya Fujita, 2013. "International Competition and Distributive Class Conflict in an Open Economy Kaleckian Model," Metroeconomica, Wiley Blackwell, vol. 64(4), pages 683-715, November.
    13. Eckhard Hein & Engelbert Stockhammer (ed.), 2011. "A Modern Guide to Keynesian Macroeconomics and Economic Policies," Books, Edward Elgar Publishing, number 13962.
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    Cited by:

    1. Elton Beqiraj & Lucrezia Fanti & Luca Zamparelli, 2019. "Sectoral Composition of Output and the Wage Share: a Two-Sector Kaleckian Model," Working Papers 3/19, Sapienza University of Rome, DISS.
    2. Beqiraj, Elton & Fanti, Lucrezia & Zamparelli, Luca, 2019. "Sectoral composition of output and the wage share: The role of the service sector," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 1-10.
    3. Brenck, Clara & Carvalho, Laura, 2020. "The equalizing spiral in early 21st century Brazil: a Kaleckian model with sectoral heterogeneity," Structural Change and Economic Dynamics, Elsevier, vol. 55(C), pages 298-310.
    4. Murakami, Hiroki & Zimka, Rudolf, 2020. "On dynamics in a two-sector Keynesian model of business cycles," Chaos, Solitons & Fractals, Elsevier, vol. 130(C).

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    More about this item

    Keywords

    Kaleckian model; Two-sector economy; Effective demand; Productivity growth;
    All these keywords.

    JEL classification:

    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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