This paper constructs an open economy Kaleckian model in which international competition affects the bargaining process between firms and workers, and investigates the effects of such bargaining on the macroeconomy. We show that the effects of a change in the bargaining power on aggregate demand depends not only on the demand regimes but also on which agents bears more of the burden arising from the international price competition. Moreover, if the real exchange rate has a small impact on the trade balance, the economy is stable, whereas if it has a larger impact on the trade balance, the economy is unstable.

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In this study, we build a Kaleckian model incorporating institutional differences between the wage determination of regular employment and that of non-regular employment. In our model, three types of wage-bargaining regimes are defined based on how regular workers’ collective wage bargaining affects the real wage rate of non-regular workers. We investigate the stability conditions of the dynamical system under each combination of demand regimes and wage-bargaining regimes. We also conduct comparative static analysis and show that the effects of changes in the parameters are diverse depending on combinations of demand regimes and wage-bargaining regimes.

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In this study, we build a Kaleckian model incorporating fiscal policies and investigate the possibility that fiscal policies have had a stabilizing influence on the dynamics of effective demand and income distribution in Japan. In a Kaleckian model with a fluctuating income distribution rate, the combination of the demand and distributive regimes may destabilize the system, and it is important to clarify the policy approach to stabilize it. For this purpose, we specify dynamic system consisting of three variables, the rate of capacity utilization, wage share, and the level of government expenditure. Then we estimate the parameters in this model using data relating to the Japanese economy from 1977 to 2007. As a result, we obtained the following findings: first, even if the combination of demand and distributive regimes has the potential to destabilize the system, the system may stabilize if counter-cyclical fiscal policy has a sufficient effect on the effective demand and if the government does not take an excessive budgetary austerity stance. Second, in Japan, the dynamics of effective demand and income distribution may have been unstable, and fiscal policy has not contributed to systemic stability. Third, the main reason Japan's fiscal policy did not have a stabilizing effect was not the stance of the government's fiscal policy, but rather the insufficient effect of the policy on effective demand. These results suggest the existence of different factors that stabilized the Japanese economy.