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A neoclassical Kaldor model of real wage declines

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  • Michael Sattinger

Abstract

A model linking macroeconomic equilibrium and income distribution in balanced growth equilibria is developed as a variant to the Kaldor model of factor shares. It departs from the original Kaldor model in assuming equal saving rates and a neoclassical production function. Macroeconomic equilibrium (national savings equal to investment) combines with competitive microeconomic behavior to determine the real wage and real interest rate. An increase in the ratio of national debt to labor reduces the real wage, explaining recent declines. Copyright Springer 2005

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  • Michael Sattinger, 2005. "A neoclassical Kaldor model of real wage declines," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 3(2), pages 91-108, August.
    • Handle: RePEc:kap:jecinq:v:3:y:2005:i:2:p:91-108
    DOI: 10.1007/s10888-005-1088-5
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    References listed on IDEAS

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    6. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555, Elsevier.
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    Cited by:

    1. Michael Sattinger, 2010. "Income Tax Incidence with Positive Population Growth," Discussion Papers 10-04, University at Albany, SUNY, Department of Economics.

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