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The macrodynamics of an endogenous business cycle model of marxist inspiration

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  • Cajas Guijarro, John
  • Vera, Leonardo

Abstract

This study offers a model that formalizes some of Marx's insights about how capital accumulation generates contradictions that may reproduce never-ending cycles of booms and slumps. The model takes the reserve army of labor as a regulator of the distribution of class-power over the business cycle with a two-sided role: influencing labor productivity, directly through the intensity of labor and indirectly through real wages. The model forms a complex dynamical system capable to yield trajectories for the employment rate, the wage share, and the intensity of labor. Goodwin (1967) model may be considered as a particular case of the model. Complex dynamics may also emerge when we remove some key assumptions and explore and simulate 3-D versions of the system. Though close orbits around non-hyperbolic equilibrium points can be obtained, the possibility of unstable dynamics with increasing amplitudes in the trade cycle and a structural crisis cannot be ruled out.

Suggested Citation

  • Cajas Guijarro, John & Vera, Leonardo, 2022. "The macrodynamics of an endogenous business cycle model of marxist inspiration," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 566-585.
    • Handle: RePEc:eee:streco:v:62:y:2022:i:c:p:566-585
    DOI: 10.1016/j.strueco.2022.08.002
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    Cited by:

    1. Cajas Guijarro, John, 2023. "An Extended Goodwin Model with Endogenous Technical Change: Theory and Simulation for the US Economy (1960-2019)," MPRA Paper 118878, University Library of Munich, Germany.
    2. Cajas Guijarro, John, 2024. "An extended Goodwin model with endogenous technical change and labor supply," Structural Change and Economic Dynamics, Elsevier, vol. 70(C), pages 699-710.
    3. Cajas Guijarro, John, 2023. "A Classical Marxian Two-Sector Endogenous Cycle Model: Integrating Marx, Dutt, and Goodwin," MPRA Paper 118665, University Library of Munich, Germany.

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    More about this item

    Keywords

    Business cycle; Capital accumulation; Reserve army of labor; Labor intensity;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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