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Technological Progress, Income Distribution And Capacity Utilisation: A Computer Simulation-Based Analysis

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  • Fabio Hideki Ono
  • José Luis Oreiro

Abstract

The paper presents a post-keynesian growth model in which (i) the mark-up rate varies in the long-term due to a misalignment between the actual rate and the 'desired' profit rate; and (ii) the capital-output ratio is not necessarily constant, on the contrary it may shift as a result of the technological progress, which according the Harrod's typology can be neutral, capital saving or capital intensive. We demonstrate that the economic stability is only reached if the technological progress is neutral or capital intensive and the investiment is susceptible to fluctuations in the mark-up rate. After undergoing computer simulations, we noticed that an endogenous transition from a wage-led to a profit-led accumulation regime is feasible. Furthermore, we identified a tendency to the stabilization of the profit rate, conditioned to a high savings out of profits ratio.

Suggested Citation

  • Fabio Hideki Ono & José Luis Oreiro, 2004. "Technological Progress, Income Distribution And Capacity Utilisation: A Computer Simulation-Based Analysis," Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32nd Brazilian Economics Meeting] 085, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    • Handle: RePEc:anp:en2004:085
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    File URL: http://www.anpec.org.br/encontro2004/artigos/A04A085.pdf
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    References listed on IDEAS

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    1. Luigi L. Pasinetti, 1962. "Rate of Profit and Income Distribution in Relation to the Rate of Economic Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 29(4), pages 267-279.
    2. Joan Robinson, 1962. "Essays in the Theory of Economic Growth," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-00626-7.
    3. Bhaduri, Amit & Marglin, Stephen, 1990. "Unemployment and the Real Wage: The Economic Basis for Contesting Political Ideologies," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 14(4), pages 375-393, December.
    4. Solow, Robert M., 2000. "Growth Theory: An Exposition," OUP Catalogue, Oxford University Press, edition 2, number 9780195109030.
    5. Amitava K. Dutt (ed.), 1994. "New Directions In Analytical Political Economy," Books, Edward Elgar Publishing, number 157.
    6. You, Jong-Il, 1994. "Macroeconomic Structure, Endogenous Technical Change and Growth," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 18(2), pages 213-234, April.
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    Cited by:

    1. Olivier Allain, 2006. "La modération salariale : le point de vue des (néo-)kaleckiens," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00196500, HAL.
    2. Olivier Allain, 2006. "La modération salariale : le point de vue des (néo-)kaleckiens," Post-Print halshs-00196500, HAL.

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    More about this item

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium

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