On the Dynamics of Profit- and Wage-led Growth
This paper examines how variable output and profit share jointly determine investment and saving, while the difference between investment and saving determines the changes in output and profit share. Analysis of the resulting pair of differential equations yields novel implications for the multiplier process. In this more general framework a number of separate strands of the Keynesian inspired literature can be understood. In particular the model incorporating both forced saving and profit squeeze analyses stability of the dynamical system to bring out the complex relation between in- and out-of-equilibrium profit- and wage-led regimes.
|Date of creation:||Mar 2007|
|Publication status:||Published as wiiw Working Paper|
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- Skott,Peter, 2008.
"Conflict and Effective Demand in Economic Growth,"
Cambridge University Press, number 9780521066310, October.
- Hicks, J. R., 1979. "Critical Essays in Monetary Theory," OUP Catalogue, Oxford University Press, number 9780198284239, December.
- Amit Bhaduri & Kazimierz Laski & Martin Riese, 2006. "A Model Of Interaction Between The Virtual And The Real Economy," Metroeconomica, Wiley Blackwell, vol. 57(3), pages 412-427, 07.
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