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A neo-Kaleckian–Goodwin model of capitalist economic growth: monopoly power, managerial pay and labour market conflict

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  • Thomas I. Palley

Abstract

This paper presents a neo-Kaleckian–Goodwin model of growth and distribution. The key innovation is the introduction of managerial pay. Kaleckian monopoly power determines the functional distribution of income and Goodwin labour bargaining power determines the wage-bill division. The model helps explain slower US growth over the past 30 years. For much of that period the functional distribution of income was relatively constant, but growth slowed because income inequality increased owing to a wage-bill shift from workers to managers. The wage-bill division effect explains why economies can display wage-led and profit-led characteristics. Economies can be profit-led regarding functional income distribution and wage-led regarding wage-bill distribution.

Suggested Citation

  • Thomas I. Palley, 2014. "A neo-Kaleckian–Goodwin model of capitalist economic growth: monopoly power, managerial pay and labour market conflict," Cambridge Journal of Economics, Oxford University Press, vol. 38(6), pages 1355-1372.
  • Handle: RePEc:oup:cambje:v:38:y:2014:i:6:p:1355-1372.
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    File URL: http://hdl.handle.net/10.1093/cje/bet001
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    Cited by:

    1. Soon Ryoo, 2016. "Inequality of Income and Wealth in the Long Run: A Kaldorian Perspective," Metroeconomica, Wiley Blackwell, vol. 67(2), pages 429-457, May.
    2. repec:elg:ejeepi:v:14:y:2017:i:2:p131-172 is not listed on IDEAS
    3. repec:anp:econom:v:17:y:2016:3:265_278 is not listed on IDEAS
    4. Fernando Rugitsky, 2016. "Growth, distribution, and sectoral heterogeneity: Reading the Kaleckians in Latin America," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 17(3), pages 265-278.
    5. Eckhard Hein, 2017. "Post-Keynesian macroeconomics since the mid 1990s: main developments," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 14(2), pages 131-172, September.
    6. Arthur Brackmann Netto, 2018. "From Classes to Individuals: Standardizing a Link Between Personal and Functional Distribution," Working Papers, Department of Economics 2018_15, University of São Paulo (FEA-USP).
    7. Gries, Thomas, 2018. "A New Theory of Demand-Restricted Growth," Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181515, Verein für Socialpolitik / German Economic Association.
    8. Steven Fazzari & Piero Ferri & AnnaMaria Variato, 2018. "Demand-led growth and accommodating supply," FMM Working Paper 15-2018, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.

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