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The Profit–Investment–Unemployment Nexus And Capacity Utilization In A Stock‐Flow Consistent Model

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  • Jean‐Bernard Chatelain

Abstract

This paper studies under which conditions the share of profit in value‐added, financial constraints on investment and capital shortage may foster unemployment and may limit the growth of capital and/or the growth of aggregate demand, in a stock‐flow consistent model. The efficiency of demand‐side versus supply‐side economic policies (decrease of the real interest rate and/or of the real wage, increase of the leverage ceiling constraint) depends on capital shortage and credit rationing, which are not necessarily simultaneous due to the effects of investment on aggregate demand and supply.

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  • Jean‐Bernard Chatelain, 2010. "The Profit–Investment–Unemployment Nexus And Capacity Utilization In A Stock‐Flow Consistent Model," Metroeconomica, Wiley Blackwell, vol. 61(3), pages 454-472, July.
    • Handle: RePEc:bla:metroe:v:61:y:2010:i:3:p:454-472
    DOI: 10.1111/j.1467-999X.2009.04074.x
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    3. Diogo Martins & Bruno Damásio, 2020. "One Troika fits all? Job crash, pro-market structural reform and austerity-driven therapy in Portugal," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 47(3), pages 495-521, August.
    4. Naqvi, Syed Ali Asjad, 2015. "Modeling Growth, Distribution, and the Environment in a Stock-Flow Consistent Framework," Ecological Economic Papers 2, WU Vienna University of Economics and Business.
    5. Arto Kovanen, 2019. "Wage Growth Puzzle and Capacity Utilization," Applied Economics and Finance, Redfame publishing, vol. 6(2), pages 15-31, March.
    6. Antoine Godin, 2012. "Guaranteed Green Jobs: Sustainable Full Employment," Economics Working Paper Archive wp_722, Levy Economics Institute.

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