Unemployment and the real wage: the economic basis for contesting political ideologies

Bhaduri, Amit; Marglin, Stephen A.

doi:10.1093/oxfordjournals.cje.a035141

Cited by 944 publications

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“…This section will present a Post-Keynesian model based on Bhaduri and Marglin (1990) that forms the basis for the empirical investigation. It is used to analyze the effects of changes in functional income distribution on aggregate demand.…”

Section: Theoretical Background: Wage-led Und Profit-led Demand Regimesmentioning

confidence: 99%

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Functional income distribution and aggregate demand in the Euro area

Stockhammer¹,

Onaran²,

Ederer³

2008

Cambridge Journal of Economics

232

156

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-An increase in the wage share has contradictory effects on the subaggregates of aggregate demand. Private consumption expenditures ought to increase because wage incomes typically are associated with higher consumption propensities than capital incomes. Investment expenditures ought to be negatively affected because investment will positively depend on profits. Net exports will be negatively affected because an increase in the wage share corresponds to an increase in unit labor costs and thus a loss in competitiveness. Theoretically aggregate demand can therefore be either wage led or profit led depending on how these effects add up. The results will crucially depend on how open the economy is internationally. The paper estimates a Post-Kaleckian macro model incorporating these effects for the Euro area and finds that the Euro area is presently in a wage-led demand regime. Implications for wage policies are discussed.

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Section: Theoretical Background: Wage-led Und Profit-led Demand Regimesmentioning

confidence: 99%

“…The model is a version of the model presented by Bhaduri and Marglin (1990). It is a Post-Kaleckian macro model that allows for wage-led as well as for profit-led demand regimes according to the relative size of the consumption differential, the sensitivity of investment to profits and the sensitivity of net exports to unit labor costs.…”

Section: Introductionmentioning

confidence: 99%

Functional income distribution and aggregate demand in the Euro area

Stockhammer¹,

Onaran²,

Ederer³

2008

Cambridge Journal of Economics

232

156

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“…1 But in general this terminology is adopted to designate the growth model that was initially coined by Kaldor (1956) and Robinson (1956Robinson ( , 1962 and extended by Dutt (1984), Rowthorn (1982) as well as by Bhaduri and Marglin (1990). Integral to its evolution the PKGM passes through three principal phases that are labeled as 'generations'.…”

Section: Introductionmentioning

confidence: 99%

“…The key assumption behind this result is that the growth rate of investment is a function not only of the profit rate, as in Kaldor-Robinson but also of the rate of capacity utilization. Bhaduri and Marglin (1990) have challenged this view by considering that the growth rate of investment is a straight function not of the profit rate but of the profit share. According to them the profit rate should be replaced by the margin of profit conveyed by the profit share in the investment equation.…”

Section: Introductionmentioning

confidence: 99%

“…By relying upon vertical integration it becomes possible to carry out the analysis initiated by Kaldor (1956) and Robinson (1956Robinson ( , 1962, and followed by Dutt (1984), Rowthorn (1982) and later Bhaduri and Marglin (1990) in a multi-sectoral model in which demand and productivity increase at different paces in each sector. By adopting this approach it is possible to show that the structural economic dynamics is conditioned not only to patterns of evolving demand and diffusion of technological progress but also to the distributive features of the economy, which can give rise to different regimes of economic growth.…”

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A multi-sectoral version of the Post-Keynesian growth model

Azevedo

Teixeira

2015

Estud. Econ.

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With this inquiry, we seek to develop a disaggregated version of the post-Keynesian approach to economic growth, by showing that indeed it can be treated as a particular case of the Pasinettian model of structural change and economic expansion. By relying upon vertical integration it becomes possible to carry out the analysis initiated by Kaldor (1956) and Robinson (1956Robinson ( , 1962, and followed by Dutt (1984), Rowthorn (1982) and later Bhaduri and Marglin (1990) in a multi-sectoral model in which demand and productivity increase at different paces in each sector. By adopting this approach it is possible to show that the structural economic dynamics is conditioned not only to patterns of evolving demand and diffusion of technological progress but also to the distributive features of the economy, which can give rise to different regimes of economic growth. Besides, we find it possible to determine the natural rate of profit that makes the mark-up rate to be constant over time. KeywordsPost-Keynesian growth model. Structural change. Multi-sector models. ResumoNeste artigo, pretende-se desenvolver uma versão desagregada da abordagem pós--Keynesiana para o crescimento econômico, mostrando que de fato esse modelo pode ser tratado como um caso particular do modelo Pasinettiano de mudança estrutural e crescimento econômico. Utilizando-se o conceito de integração vertical, torna-se possível conduzir a análise iniciada por Kaldor (1956) e Robinson (1956, 1962, e seguido por Dutt (1984), Rowthorn (1982) e, posteriormente, Bhaduri e Marglin (1990) em um modelo multi-sectorial em que há aumentos da demanda e produtividade em ritmos diferentes em cada setor. Ao adotar essa abordagem, é possível mostrar que a dinâmica de mudança estrutural está condicionada não apenas aos padrões de deman-♦ A preliminary version of this paper was presented in the VIII International Colloquium on Economic Growth, Structural Change and Institutions held in Galway, Ireland, May 26-28, 2011. We would like to thank the participants of the colloquium and an anonymous referee for helpful comments. The usual disclaimer applies.Estud. Econ., São Paulo, vol.45, n.1, p. 127-152, jan.-mar. 2015 128 Ricardo Azevedo Araujo e Joanílio Rodolpho Teixeira da de evolução das preferências e da difusão do progresso tecnológico, mas também com as características distributivas da economia, que podem dar origem a diferentes regimes setoriais de crescimento econômico. Além disso, é possível determinar a taxa natural de lucro que faz com que a taxa de mark-up seja constante ao longo do tempo. Palavras-ChaveModelo Pós-Keynesiano de crescimento econômico. Mudança estrutural. Modelos multi-setoriais. JEL ClassificationE21, O11.

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Stock‐Flow Consistent Macroeconomic Models: A Survey

Nikiforos

Zezza

2018

Analytical Political Economy

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The stock-flow consistent (SFC) modeling approach, grounded in the pioneering work of Wynne Godley and James Tobin in the 1970s, has been adopted by a growing number of researchers in macroeconomics, especially after the publication of Godley and Lavoie (2007), which provided a general framework for the analysis of whole economic systems, and the recognition that macroeconomic models integrating real markets with flow-of-funds analysis had been particularly successful in predicting the Great Recession of 2007-9. We introduce the general features of the SFC approach for a closed economy, showing how the core model has been extended to address issues such as financialization and income distribution. We next discuss the implications of the approach for models of open economies and compare the methodologies adopted in developing SFC empirical models for whole countries. We review the contributions where the SFC approach is being adopted as the macroeconomic closure of microeconomic agent-based models, and how the SFC approach is at the core of new research in ecological macroeconomics. Finally, we discuss the appropriateness of the name "stock-flow consistent" for the class of models we survey.

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Unemployment and the real wage: the economic basis for contesting political ideologies

Cited by 944 publications

References 3 publications

Functional income distribution and aggregate demand in the Euro area

Functional income distribution and aggregate demand in the Euro area

A multi-sectoral version of the Post-Keynesian growth model

Stock‐Flow Consistent Macroeconomic Models: A Survey

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