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Distribution, inflation and growth in the SM model

In: The Supermultiplier

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Abstract

The supermultiplier (SM) model assumes constant technology and distribution in a given period. Yet, it is well equipped to analyse how distribution changes impact demand and, therefore, output, employment and growth. Neo-Kaleckian economists pay particular attention to two types of growth regimes: wage-led and profit-led. We consider that in a capitalist system, growth is always demand-driven. In a second step, through an econometric study, we can inspect whether the wage share has increased or decreased in a particular boom period. Booms are usually associated with an increase in the employment rate, nominal wages and inflation. This is the message of the Phillips curve. Cost inflation may also be caused by energy shortages. Asset inflation is usually linked to credit acceleration and over-liquidity.

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  • ., 2023. "Distribution, inflation and growth in the SM model," Chapters, in: The Supermultiplier, chapter 8, pages 138-153, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:20864_8
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    File URL: https://www.elgaronline.com/doi/10.4337/9781800889552.00013
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    Keywords

    Economics and Finance;

    Statistics

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