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Cyclical Growth in a Goodwin-Kalecki-Marx Model

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  • Hiroaki SASAKI
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    Abstract

    This paper presents a Kaleckian growth model that considers elements from Goodwin and Marx. The model has a system of differential equations for the rate of utilization, the profit share, and the rate of employment. We show that cyclical fluctuations occur depending on the sizes of the reserve-army effect and the reserve-army-creation effect. Moreover, we show that if the stable long-run equilibrium corresponds to the profit-led growth regime, an increase in the bargaining power of workers increases the rate of unemployment; on the other hand, if the equilibrium corresponds to the wage-led growth-regime, an increase in the bargaining power of workers decreases the rate of unemployment.

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    File URL: http://hdl.handle.net/10097/55396
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    File URL: http://ir.library.tohoku.ac.jp/re/bitstream/10097/55396/1/terg246.pdf
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    Bibliographic Info

    Paper provided by Graduate School of Economics and Management, Tohoku University in its series TERG Discussion Papers with number 246.

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    Length: 32 pages
    Date of creation: Aug 2009
    Date of revision:
    Handle: RePEc:toh:tergaa:246

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    1. Miguel A. LeÛn-Ledesma & A. P. Thirlwall, 2002. "The endogeneity of the natural rate of growth," Cambridge Journal of Economics, Oxford University Press, vol. 26(4), pages 441-459, July.
    2. Engelbert Stockhammer, 2004. "Is there an equilibrium rate of unemployment in the long run?," Review of Political Economy, Taylor & Francis Journals, vol. 16(1), pages 59-77.
    3. Yoshida, Hiroyuki, 1999. "Harrod's Knife-Edge Reconsidered: An Application of the Hopf Bifurcation Theorem and Numerical Simulations," Journal of Macroeconomics, Elsevier, vol. 21(3), pages 537-562, July.
    4. Mark Setterfield, 2009. "Macroeconomics without the LM curve: an alternative view," Cambridge Journal of Economics, Oxford University Press, vol. 33(2), pages 273-293, March.
    5. Servaas Storm & C. W. M. Naastepad, 2007. "It is high time to ditch the NAIRU," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 29(4), pages 531-554, July.
    6. Mario Cassetti, 2006. "A note on the long-run behaviour of Kaleckian models," Review of Political Economy, Taylor & Francis Journals, vol. 18(4), pages 497-508.
    7. Norman Sedgley & Bruce Elmslie, 2004. "The conventional wage share vs. full employment: implications for the development of growth theory," Cambridge Journal of Economics, Oxford University Press, vol. 28(6), pages 875-888, November.
    8. Peter Skott & Peter Flaschel, 2004. "Steindlian Models of Growth and Stagnation," UMASS Amherst Economics Working Papers 2004-11, University of Massachusetts Amherst, Department of Economics.
    9. Alexander V. Ryzhenkov, 2009. "A Goodwinian Model With Direct And Roundabout Returns To Scale (An Application To Italy)," Metroeconomica, Wiley Blackwell, vol. 60(3), pages 343-399, 07.
    10. Shah, Anup & Desai, Meghnad, 1981. "Growth Cycles with Induced Technical Change," Economic Journal, Royal Economic Society, vol. 91(364), pages 1006-10, December.
    11. Mario Sportelli, 2000. "Dynamic complexity in a Keynesian growth-cycle model involving Harrod's instability," Journal of Economics, Springer, vol. 71(2), pages 167-198, June.
    12. Skott, Peter, 1989. "Effective Demand, Class Struggle and Cyclical Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(1), pages 231-47, February.
    13. Amitava Krishna Dutt, 2006. "Aggregate Demand, Aggregate Supply and Economic Growth," International Review of Applied Economics, Taylor & Francis Journals, vol. 20(3), pages 319-336.
    14. Amit Bhaduri, 2006. "Endogenous economic growth: a new approach," Cambridge Journal of Economics, Oxford University Press, vol. 30(1), pages 69-83, January.
    15. Srinivas Raghavendra, 2006. "Limits to Investment Exhilarationism," Journal of Economics, Springer, vol. 87(3), pages 257-280, 04.
    16. Foley, Duncan K., 2003. "Endogenous technical change with externalities in a classical growth model," Journal of Economic Behavior & Organization, Elsevier, vol. 52(2), pages 167-189, October.
    17. Mario Cassetti, 2003. "Bargaining power, effective demand and technical progress: a Kaleckian model of growth," Cambridge Journal of Economics, Oxford University Press, vol. 27(3), pages 449-464, May.
    18. Gilberto Tadeu Lima, 2004. "Endogenous Technological Innovation, Capital Accumulation And Distributional Dynamics," Metroeconomica, Wiley Blackwell, vol. 55(4), pages 386-408, November.
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    Cited by:
    1. Hiroaki Sasaki, 2013. "Cyclical growth in a Goodwin–Kalecki–Marx model," Journal of Economics, Springer, vol. 108(2), pages 145-171, March.

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