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Progressive supply-side economics: an explanation and update of the Rehn-Meidner model
[Good jobs versus bad jobs]

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  • Lennart Erixon

Abstract

The Swedish Rehn-Meidner model is a unique economic- and wage-policy program for the simultaneous achievement of full employment, price stability, growth and equality. This article presents, specifies and develops the model’s underlying macroeconomic theory. The Rehn-Meidner theory is a synthesis between a flex-price Kaldorian model of profit margins and a Kaleckian model where profit margins are squeezed under full-employment conditions. The theory deviates from both the Kaldorian and Kaleckian models by stressing the importance of low profit margins for productivity growth. Moreover, in the Rehn-Meidner program, full employment is guaranteed irrespective of the level of aggregate demand. The Rehn-Meidner theory and policy deserve a prominent place in macroeconomics even in the age of globalization and financialization. However, some weaknesses of the model make it necessary to modify the arguments for and partly the composition of its policy program.

Suggested Citation

  • Lennart Erixon, 2018. "Progressive supply-side economics: an explanation and update of the Rehn-Meidner model [Good jobs versus bad jobs]," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 42(3), pages 653-697.
    • Handle: RePEc:oup:cambje:v:42:y:2018:i:3:p:653-697.
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    File URL: http://hdl.handle.net/10.1093/cje/bex042
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    Citations

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    Cited by:

    1. Erixon, Lennart, 2018. "The Stockholm School in a New Age – Erik Lundberg and the Swedish Model," Research Papers in Economics 2018:4, Stockholm University, Department of Economics.
    2. Bengtsson, Erik, 2023. "The politics of profits: Profit squeeze and political-economic change in Sweden, 1975–1985," Lund Papers in Economic History 250, Lund University, Department of Economic History.
    3. Servaas Storm, 2021. "Labour's loss: Why macroeconomics matters," PSL Quarterly Review, Economia civile, vol. 74(299), pages 249-285.
    4. Jakob Molinder, 2022. "How effective are mobility subsidies in targeting the unemployed? Lessons from the Swedish Model, 1965–1975," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 43(4), pages 1724-1746, November.
    5. Focacci, Chiara Natalie & Perez, Carlota, 2022. "The importance of education and training policies in supporting technological revolutions: A comparative and historical analysis of UK, US, Germany, and Sweden (1830–1970)," Technology in Society, Elsevier, vol. 70(C).
    6. Rafael De Acypreste & Joao Gabriel De Araujo Oliveira, 2022. "Structural change, an open economy and employment: A structural change and economic dynamics approach," PSL Quarterly Review, Economia civile, vol. 75(300), pages 47-62.

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