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Distributive cycles and endogenous technical change in a BoPC growth model

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  • Marwil J. Dávila-Fernández

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  • Serena Sordi

    ()

Abstract

Our purpose in this paper is to expand Goodwin's (1967) distributive cycle model to an open economy framework in a way that incorporates the balance-of-payments constraint on growth. We do so by allowing technical change to be endogenous to the cyclical dynamics of the system and by adopting an independent investment function. We show that a Hopf-Bifurcation analysis establishes the possibility of persistent and boundedcyclical paths both for a 3D and a 4D extension of the model. Some numerical simulations are performed based on the analytical models developed. Motivational empirical evidence is also provided for Thirlwall's law and the respective adjustment mechanism using a sample of 17 OECD countries.

Suggested Citation

  • Marwil J. Dávila-Fernández & Serena Sordi, 2017. "Distributive cycles and endogenous technical change in a BoPC growth model," Department of Economics University of Siena 760, Department of Economics, University of Siena.
  • Handle: RePEc:usi:wpaper:760
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    Keywords

    Growth cycle; Goodwin; Thirlwall?s law; Kaldor-Verdoorn; Distributive cycles; Hopf bifurcation.;

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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