On dynamics in a two-sector Keynesian model of business cycles

Murakami, Hiroki; Zimka, Rudolf

doi:10.1016/j.chaos.2019.109419

Cited by 7 publications

(11 citation statements)

References 39 publications

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“…Second, Murakami (2017) finds the existence of limit cycles, and Murakami and Zimka (2020) further identify their stability in a two-sector model. Interestingly, they reveal that investment goods production leads consumption goods production in business cycles.…”

Section: Introductionmentioning

confidence: 92%

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Income distribution, technical change, and economic growth: A two-sector Kalecki–Kaldor approach

Nishi

2022

Structural Change and Economic Dynamics

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This paper presents a two-sector Kalecki-Kaldor model of income distribution, technical change, and economic growth. The model is Kaleckian in the sense that it incorporates mark-up pricing, investment independent of saving, and excess capacity. It is also Kaldorian in that labour productivity growth is led by Kaldor's technical progress function. In other words, productivity growth is endogenously realised through the technology embodied in new capital stock, which differentiates our model from previous two-sector models. Our extension drastically changes the standard Kaleckian implications. We find that although the economic activity levels in the short run are led by the demand and income distribution parameters, economic growth in the long run is realised by supply-side (i.e. technical change and the associated productivity and wage growth) parameters. The important implication of our findings is that a two-sector economy faces a trade-off between a high economic growth rate and the local stability of the steady state.

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Section: Introductionmentioning

confidence: 92%

“…(i) the effect of income distribution and savings (Fujita (2019a,b); Beqiraj et al (2019)), (ii) the possibility of business cycles (Murakami (2017); Murakami and Zimka (2020)), and (iii) endogenous change in productivity growth (Bassi and Lang (2016); Nishi (2020)).…”

Section: Introductionmentioning

confidence: 99%

Income distribution, technical change, and economic growth: A two-sector Kalecki–Kaldor approach

Nishi

2022

Structural Change and Economic Dynamics

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“…The ratio of aggregate potential output to capital, which is the reciprocal of the capital coefficient, was estimated by Flaschel et al [6] to 0.5091 for the U.S. economy. 30 Flaschel et al [6] estimated the values of ip and iu as 0.1353 and 0.034, respectively. They also estimated the marginal propensities to save of capitalists and workers at 0.6230 and 0.0510.…”

Section: Stability and Instability Of A Limit Cyclementioning

confidence: 99%

“…4 For recent exceptional investigations of the stability of periodic orbits in high-dimensional dynamic models (with dimensionality of three or more) in economics, see Asada et al [1,2] and Murakami and Zimka [30]. 5 Murakami [21] established the existence of stable limit cycles in the two-dimensional model but not in the three-or four-dimensional model.…”

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confidence: 99%

“…Certainly, this study aimed to prove the existence of periodic orbits, but it was more interested in the effects of price flexibility and of inflation expectations on economic stability (i.e., the local asymptotic stability of equilibrium) than in the stability of periodic orbits. 6 Murakami and Zimka [30] thoroughly studied a rigid-price two-sector Keynesian model (composed of the consumption-good and investment-good sectors) to verify that a stable limit cycle is generated, while we will examine a flexible-price one-sector Keynesian model to find that an unstable limit cycle appears. 7 Hopf bifurcations generating stable and unstable limit cycles are called supercritical and subcritical ones, respectively (cf.…”

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confidence: 99%

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