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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.

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  • 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. "A Classical Marxian Two-Sector Endogenous Cycle Model: Integrating Marx, Dutt, and Goodwin," MPRA Paper 118665, University Library of Munich, Germany.
    2. 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.

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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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