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Endogenous technological change, income distribution, and unemployment with inter-class conflict

  • Sasaki, Hiroaki

This paper presents a Kaleckian growth model that incorporates endogenous technological change. The model endogenously determines the rate of capacity utilization, the rate of economic growth, income distribution, and the employment rate in addition to technological change. The paper shows that whether or not an increase in the relative bargaining power of workers raises the long-run equilibrium unemployment rate depends on which regime is realized in the long-run equilibrium. If, for example, the long-run equilibrium corresponds to the wage-led growth regime, a rise in the relative bargaining power of workers leads to a decline in the unemployment rate. This result is never obtained from the mainstream NAIRU model.

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Article provided by Elsevier in its journal Structural Change and Economic Dynamics.

Volume (Year): 21 (2010)
Issue (Month): 2 (May)
Pages: 123-134

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Handle: RePEc:eee:streco:v:21:y:2010:i:2:p:123-134
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/525148

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  1. Rowthorn, R E, 1977. "Conflict, Inflation and Money," Cambridge Journal of Economics, Oxford University Press, vol. 1(3), pages 215-39, September.
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  14. 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.
  15. You, Jong-Il, 1994. "Macroeconomic Structure, Endogenous Technical Change and Growth," Cambridge Journal of Economics, Oxford University Press, vol. 18(2), pages 213-34, April.
  16. 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.
  17. Engelbert Stockhammer, 2006. "Is the NAIRU theory a Monetarist, New Keynesian, Post Keynesian or a Marxist theory?," Department of Economics Working Papers wuwp096, Vienna University of Economics and Business, Department of Economics.
  18. 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.
  19. Engelbert Stockhammer, 2000. "Is There an Equilibrium Rate of Unemployment in the Long Run?," Working Papers geewp10, Vienna University of Economics and Business Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
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