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Structural change, aggregate demand and employment dynamics in the OECD, 1970-2010

The paper combines Baumol’s model of structural change with a model of aggregate demand growth in the Keynesian-Kaleckian tradition to predict the dynamics of aggregate employment. The model for the demand regime is estimated with – and Baumol’s model for the productivity regime is calibrated on – OECD data. The trajectory for employment predicted by the combination of the two models tracks the actual employment dynamics in the OECD over the period 1970-2010 remarkably well.

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Paper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 13-343.

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Length: 25 pages
Date of creation: Oct 2013
Date of revision:
Handle: RePEc:kof:wpskof:13-343
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