A Growth Cycle

Goodwin, Richard M.

doi:10.1007/978-1-349-05504-3_12

Cited by 381 publications

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“…One influential view is derived from Goodwin's (1967) model, in which the cycle is generated by the interaction between a profit-led demand function and a reserve army distribution function. The Goodwin cycle posits that an increase in the wage share will have a negative effect on demand because investment is driven by the profit share.…”

Section: Introductionmentioning

confidence: 99%

Pseudo-Goodwin cycles in a Minsky model

Stockhammer¹,

Michell²

2016

CAMECO

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Goodwin cycles result from the dynamic interaction between a profit-led demand regime and a reserve army effect in income distribution. The paper proposes the concept of a pseudo-Goodwin cycle. We define this as a counter-clockwise movement in output and wage share space which is not generated by the usual Goodwin mechanism. In particular, it does not depend on a profit-led demand regime. To illustrate this, a simple Minsky-type model is extended by a reserve army distribution adjustment. In this model the cycle is generated by the interaction of financial fragility and demand. The wage share rises at higher levels of output but this generates no feedback so that, by design, demand does not react to changes in income distribution. But the model does exhibit a pseudo-Goodwin cycle in the output-wage share space. This holds true even if we introduce a wage-led demand regime. This demonstrates that the existence of a counter-clockwise movement of output and the wage share cannot be regarded as proof of the existence of a Goodwin cycle and a profit-led demand regime.

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Section: Introductionmentioning

confidence: 99%

Pseudo-Goodwin cycles in a Minsky model

Stockhammer¹,

Michell²

2016

CAMECO

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“…Distributive shares measured by the conventional approach are often used to proxy the power of classes (Goodwin, 1967;Boddy and Crotty, 1975;Wolff 1979;Taylor 1979;Weisskopf, 1979;Islam 1988;Sherman, 1990;Raffalovich et al, 1992;Basu and Vasudevan, 2011;Sasaki et al, 2013), while some studies choose to more rigorously follow the Marxian approach (Moseley 1985(Moseley , 1987. Distributive shares can also reflect institutional shifts under capitalism, which has been discussed by both the Regulation theory (Aglietta, 2000) and the Social Structure of Accumulation theory (Bowles et al, 1984;Kotz et al, 1994).…”

Section: Early Studiesmentioning

confidence: 99%

“…In the literature, there are different versions of Marxian models for growth and distribution (Goodwin, 1967;Marglin, 1984;Bowles and Boyer, 1988). The Goodwin model is focused on the relationship between the growth rate of the real wage and employment over business cycles; thus it is not straightforward to explain long--run changes of labor's share with the Goodwin model.…”

Section: C3 Marxian Approach 131mentioning

confidence: 99%

The Labor Share Question in China

Qin¹

2014

Mon. Rev.

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“…We only stress that this is only one of the many interactions among various interventions. A classic application in economics is Goodwin (1967). 7 "The liberal reward of labour, therefore, as it is the necessary effect, so it is the natural symptom of increasing national wealth.…”

Section: Gnp Per Capita Growth = F 1 (Macroeconomic Policies Social mentioning

confidence: 99%

Financing Social Policy

Hujo¹,

McClanahan²

2009

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A Growth Cycle

Cited by 381 publications

References 0 publications

Pseudo-Goodwin cycles in a Minsky model

Pseudo-Goodwin cycles in a Minsky model

The Labor Share Question in China

Financing Social Policy

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