Cyclical Growth in a Goodwin-Kalecki-Marx Model
AbstractThis 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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Bibliographic InfoPaper provided by Graduate School of Economics and Management, Tohoku University in its series TERG Discussion Papers with number 246.
Length: 32 pages
Date of creation: Aug 2009
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