Demand-driven Goodwin cycles with Kaldorian and Kaleckian features

Arnim, Rudiger von; Barrales‐Ruiz, Jose

doi:10.4337/roke.2015.03.05

Cited by 47 publications

(31 citation statements)

References 2 publications

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“…Why single out autonomous‐demand models for their ability to produce level effects that fit the ‘paradox of thrift’ and the ‘paradox of cost’? The paradox of thrift—the contractionary effect of a rise in the saving rate—can be found in models that include feedback effects from the labor market (e.g., von Arnim & Barrales, ; Skott, ). In these models, an increase in the saving rate reduces the employment rate and generates a level effect of the same kind as the one that can be found in the models with autonomous demand.…”

Section: Labor Markets and The Supply Sidementioning

confidence: 99%

Autonomous demand, Harrodian instability and the supply side

Skøtt

2017

Metroeconomica

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A recent literature introduces autonomous demand as the driver of long-run economic growth and as a stabilizing force that tames Harrodian instability. The argument is unconvincing. The stabilizing e §ect is modest for plausible parameter values and, more importantly, it is questionable whether any components of aggregate demand can be viewed as autonomous in the long run. By contrast, models that include the supply side (the labor market) and/or economic policy can address Harrodian instability and produce level and growth e §ects that resemble those derived in the literature on autonomous demand. JEL numbers: E11, E12, O41

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Section: Labor Markets and The Supply Sidementioning

confidence: 99%

Autonomous demand, Harrodian instability and the supply side

Skøtt

2017

Metroeconomica

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“…15 There is excess capacity of both labor and capital, and output adjusts instantaneously to the level of demand (within the limits of labor and capital capacity). Using a Leontief production function, the capacity constraints are given by…”

Section: Behavioral Analysis and Stylized Factsmentioning

confidence: 99%

“…von Arnim and Barrales (2015) [AB] take a similar approach. The possibility of Harrodian instability is emphasized; their models include an 'output expansion function'that is almost identical to the one in Skott (1989aSkott ( , 1989b; the employment rate is seen as a key element in the determination of output growth and accumulation.…”

Section: Introductionmentioning

confidence: 99%

Growth cycles with or without price flexibility

Skøtt¹

2015

ROKE

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This note -written in response to von Arnim and Barrales (2015) -shows that (i) the Kaldor-Goodwin models in Skott (1989aSkott ( , 1989b and Skott and Zipperer (2012) provide good approximations to models with fast but …nite adjustment of prices, (ii) the models can generate cyclical patterns that match the stylized facts, and (iii) an alternative model with instantaneous output adjustment and …xed prices produces a dynamic system that is virtually identical to the Kaldor-Goodwin; this model may describe parts of the service sector.JEL codes: E12, E32

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“… Responding to the criticism raised by von Arnim and Barrales () regarding the sensitivity of prices and profit share in Kaldor–Goodwin model, Skott () showed that allowing output flexibility with fixed prices produces a dynamic system retaining the same mathematical structure as Kaldor–Goodwin model. In this respect, he proposed the flex–output model in a defensive manner.…”

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confidence: 99%

Macroeconomic stability in a flexible labor market

2018

Metroeconomica

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This paper examines the relationship between labor market flexibility and macroeconomic stability from a post‐Keynesian perspective. Considering two aspects of labor market flexibility, employment flexibility and real wage flexibility, I adopt the flex–output model to discuss employment flexibility and extend it by incorporating real wage dynamics induced from a wage–price Phillips curve to discuss real wage flexibility. Simulation of the model suggests that employment flexibility possibly increases instability of an economy whereas real wage flexibility reduces it.

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Demand-driven Goodwin cycles with Kaldorian and Kaleckian features

Cited by 47 publications

References 2 publications

Autonomous demand, Harrodian instability and the supply side

Autonomous demand, Harrodian instability and the supply side

Growth cycles with or without price flexibility

Macroeconomic stability in a flexible labor market

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