IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/100229.html
   My bibliography  Save this paper

A non-linear Keynesian Goodwin-type endogenous model of the cycle: Bayesian evidence for the USA

Author

Listed:
  • Mariolis, Theodore
  • Konstantakis, Konstantinos N.
  • Michaelides, Panayotis G.
  • Tsionas, Efthymios G.

Abstract

This paper incorporates the so-called Bhaduri-Marglin accumulation function in Goodwin's original growth cycle model and econometrically estimates the proposed model for the case of the US economy in the time period 1960-2012, using a modern Bayesian sequential Monte Carlo method. Based on our findings, the US economy follows an exhilarationist regime throughout our investigation period with the sole exception of an underconsumption regime for the time period 1974-1978. In general, the results suggest that the proposed approach is an appropriate vehicle for expanding and improving traditional Goodwin-type models.

Suggested Citation

  • Mariolis, Theodore & Konstantakis, Konstantinos N. & Michaelides, Panayotis G. & Tsionas, Efthymios G., 2019. "A non-linear Keynesian Goodwin-type endogenous model of the cycle: Bayesian evidence for the USA," LSE Research Online Documents on Economics 100229, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:100229
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/100229/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Robert A. Blecker, 2016. "Wage-led versus profit-led demand regimes: the long and the short of it," Review of Keynesian Economics, Edward Elgar Publishing, vol. 4(4), pages 373-390, October.
    2. Tavani, Daniele, 2012. "Wage bargaining and induced technical change in a linear economy: Model and application to the US (1963–2003)," Structural Change and Economic Dynamics, Elsevier, vol. 23(2), pages 117-126.
    3. Shah, Anup & Desai, Meghnad, 1981. "Growth Cycles with Induced Technical Change," Economic Journal, Royal Economic Society, vol. 91(364), pages 1006-1010, December.
    4. John Geweke, "undated". "Posterior Simulators in Econometrics," Computing in Economics and Finance 1996 _019, Society for Computational Economics.
    5. E. Stockhammere & J. Michell, 2017. "Pseudo-Goodwin cycles in a Minsky model," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 41(1), pages 105-125.
    6. Lavoie, Marc, 1995. "The Kaleckian Model of Growth and Distribution and Its Neo-Ricardian and Neo-Marxian Critiques," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 19(6), pages 789-818, December.
    7. Daniele Tavani, 2013. "Bargaining over productivity and wages when technical change is induced: implications for growth, distribution, and employment," Journal of Economics, Springer, vol. 109(3), pages 207-244, July.
    8. Samuel Bowles and Robert Boyer., 1988. "Labor Discipline and Aggregate Demand: A Macroeconomic Model," Economics Working Papers 8875, University of California at Berkeley.
    9. Eugeni, Sara, 2016. "Global imbalances in the XIX, XX and the XXI centuries," Economics Letters, Elsevier, vol. 145(C), pages 69-72.
    10. Goodwin, Richard M, 1986. "Swinging along the Turnpike with von Neumann and Sraffa," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 10(3), pages 203-210, September.
    11. David Kiefer & Codrina Rada, 2015. "Profit maximising goes global: the race to the bottom," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 39(5), pages 1333-1350.
    12. Bhaduri, Amit & Marglin, Stephen, 1990. "Unemployment and the Real Wage: The Economic Basis for Contesting Political Ideologies," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 14(4), pages 375-393, December.
    13. A. J. Julius, 2005. "Steady‐State Growth And Distribution With An Endogenous Direction Of Technical Change," Metroeconomica, Wiley Blackwell, vol. 56(1), pages 101-125, February.
    14. Bowles, Samuel & Boyer, Robert, 1988. "Labor Discipline and Aggregate Demand: A Macroeconomic Model," Department of Economics, Working Paper Series qt8sb2623g, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    15. Nan-Ting Chou & Alexei Izyumov & John Vahaly, 2016. "Rates of return on capital across the world: are they converging?," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 40(4), pages 1149-1166.
    16. Nikolaos Rodousakis, 2014. "The Stability Properties of Goodwin’s Growth Cycle Model with a Variable Elasticity of Substitution Production Function," Studies in Microeconomics, , vol. 2(2), pages 213-223, December.
    17. Amit Bhaduri, 2008. "On the dynamics of profit-led and wage-led growth," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 32(1), pages 147-160, January.
    18. Nicolas Chopin, 2002. "A sequential particle filter method for static models," Biometrika, Biometrika Trust, vol. 89(3), pages 539-552, August.
    19. Rudiger von Arnim & Jose Barrales, 2015. "Demand-driven Goodwin cycles with Kaldorian and Kaleckian features," Review of Keynesian Economics, Edward Elgar Publishing, vol. 3(3), pages 351-373, July.
    20. Roberto Veneziani & Luca Zamparelli & Daniele Tavani & Luca Zamparelli, 2017. "Endogenous Technical Change In Alternative Theories Of Growth And Distribution," Journal of Economic Surveys, Wiley Blackwell, vol. 31(5), pages 1272-1303, December.
    21. Foley, Duncan K., 2003. "Endogenous technical change with externalities in a classical growth model," Journal of Economic Behavior & Organization, Elsevier, vol. 52(2), pages 167-189, October.
    22. van der Ploeg, F., 1987. "Growth cycles, induced technical change, and perpetual conflict over the distribution of income," Journal of Macroeconomics, Elsevier, vol. 9(1), pages 1-12.
    23. Edward Wolff, 2006. "The growth of information workers in the US economy, 1950-2000: the role of technological change, computerization, and structural change," Economic Systems Research, Taylor & Francis Journals, vol. 18(3), pages 221-255.
    24. Tavani Daniele & Zamparelli Luca, 2015. "Endogenous technical change, employment and distribution in the Goodwin model of the growth cycle," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 19(2), pages 209-216, April.
    25. Hiroaki Sasaki, 2013. "Cyclical growth in a Goodwin–Kalecki–Marx model," Journal of Economics, Springer, vol. 108(2), pages 145-171, March.
    26. Blecker, Robert A, 1989. "International Competition, Income Distribution and Economic Growth," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 13(3), pages 395-412, September.
    27. Stephen A. Marglin & Amit Bhaduri, 1988. "Profit Squeeze and Keynesian Theory," WIDER Working Paper Series wp-1988-039, World Institute for Development Economic Research (UNU-WIDER).
    28. José Barrales & Rudiger von Arnim, 2017. "Longer-run distributive cycles: wavelet decompositions for the US, 1948–2011," Review of Keynesian Economics, Edward Elgar Publishing, vol. 5(2), pages 196-217, April.
    29. Garland Durham & John Geweke, 2014. "Adaptive Sequential Posterior Simulators for Massively Parallel Computing Environments," Advances in Econometrics, in: Bayesian Model Comparison, volume 34, pages 1-44, Emerald Group Publishing Limited.
    30. Rodrik, Dani, 2012. "The Globalization Paradox: Why Global Markets, States, and Democracy Can't Coexist," OUP Catalogue, Oxford University Press, number 9780199652525.
    31. Luca Zamparelli, 2015. "Induced Innovation, Endogenous Technical Change and Income Distribution in a Labor-Constrained Model of Classical Growth," Metroeconomica, Wiley Blackwell, vol. 66(2), pages 243-262, May.
    32. Nelson H. Barbosa‐Filho & Lance Taylor, 2006. "Distributive And Demand Cycles In The Us Economy—A Structuralist Goodwin Model," Metroeconomica, Wiley Blackwell, vol. 57(3), pages 389-411, July.
    33. Michalis Nikiforos & Duncan K. Foley, 2012. "Distribution And Capacity Utilization: Conceptual Issues And Empirical Evidence," Metroeconomica, Wiley Blackwell, vol. 63(1), pages 200-229, February.
    34. Bowles, Samuel & Boyer, Robert, 1988. "Labor Discipline and Aggregate Demand: A Macroeconomic Model," American Economic Review, American Economic Association, vol. 78(2), pages 395-400, May.
    35. Jonathan P. Goldstein, 1996. "The Empirical Relevance of the Cyclical Profit Squeeze: A Reassertion," Review of Radical Political Economics, Union for Radical Political Economics, vol. 28(4), pages 55-92, December.
    36. Simon Mohun, 2009. "Aggregate capital productivity in the US economy, 1964--2001," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 33(5), pages 1023-1046, September.
    37. Daniele Tavani & Peter Flaschel & Lance Taylor, 2011. "Estimated non-linearities and multiple equilibria in a model of distributive-demand cycles," International Review of Applied Economics, Taylor & Francis Journals, vol. 25(5), pages 519-538, October.
    38. Peter Flaschel & Sigrid Luchtenberg, 2012. "Roads to Social Capitalism," Books, Edward Elgar Publishing, number 14812.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jose Barrales‐Ruiz & Ivan Mendieta‐Muñoz & Codrina Rada & Daniele Tavani & Rudiger von Arnim, 2022. "The distributive cycle: Evidence and current debates," Journal of Economic Surveys, Wiley Blackwell, vol. 36(2), pages 468-503, April.
    2. Stamegna, Marco, 2022. "A Kaleckian growth model of secular stagnation with induced innovation," MPRA Paper 113794, University Library of Munich, Germany.
    3. Stamegna, Marco, 2022. "Induced innovation, the distributive cycle, and the changing pattern of labour productivity cyclicality: a SVAR analysis for the US economy," MPRA Paper 113855, University Library of Munich, Germany.
    4. Jose Barrales-Ruiz, Ivan Mendieta-Muñoz, Codrina Rada, Daniele Tavani, Rudiger von Arnim, 2020. "The distributive cycle: Evidence and current debates," Working Paper Series, Department of Economics, University of Utah 2020_07, University of Utah, Department of Economics.
    5. Rada, Codrina & Tavani, Daniele & von Arnim, Rudiger & Zamparelli, Luca, 2023. "Classical and Keynesian models of inequality and stagnation," Journal of Economic Behavior & Organization, Elsevier, vol. 211(C), pages 442-461.
    6. Konstantakis, Konstantinos N. & Michaelides, Panayotis G. & Mariolis, Theodore, 2018. "A non-linear post-Keynesian Goodwin-type endogenous model of the cycle for the USA," MPRA Paper 90036, University Library of Munich, Germany.
    7. Araujo, Ricardo Azevedo & Dávila-Fernández, Marwil J. & Moreira, Helmar Nunes, 2019. "Some new insights on the empirics of Goodwin's growth-cycle model," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 42-54.
    8. Brenck, Clara & Carvalho, Laura, 2020. "The equalizing spiral in early 21st century Brazil: a Kaleckian model with sectoral heterogeneity," Structural Change and Economic Dynamics, Elsevier, vol. 55(C), pages 298-310.
    9. Marco Stamegna, 2024. "Induced innovation, the distributive cycle, and the changing pattern of labour productivity cyclicality: an SVAR analysis for the US economy," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 41(3), pages 881-929, October.
    10. Robert A. Blecker, 2016. "Wage-led versus profit-led demand regimes: the long and the short of it," Review of Keynesian Economics, Edward Elgar Publishing, vol. 4(4), pages 373-390, October.
    11. Santetti, Marcio & Nikiforos, Michalis & von Arnim, Rudiger, 2024. "Growth, cycles, and residential investment," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 313-327.
    12. 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.
    13. Eckhard Hein, 2017. "Post-Keynesian macroeconomics since the mid 1990s: main developments," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 14(2), pages 131-172, September.
    14. Betül Mutlugün, 2022. "Endogenous income distribution and aggregate demand: Empirical evidence from heterogeneous panel structural vector autoregression," Metroeconomica, Wiley Blackwell, vol. 73(2), pages 583-637, May.
    15. Cem Oyvat & Oğuz Öztunalı & Ceyhun Elgin, 2020. "Wage‐led versus profit‐led demand: A comprehensive empirical analysis," Metroeconomica, Wiley Blackwell, vol. 71(3), pages 458-486, July.
    16. Robert A Blecker & Michael Cauvel & Y K Kim, 2022. "Systems estimation of a structural model of distribution and demand in the US economy," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 46(2), pages 391-420.
    17. Manuel David Cruz & Daniele Tavani, 2022. "Secular Stagnation: A Classical-Marxian View," Working Papers PKWP2229, Post Keynesian Economics Society (PKES).
    18. Daniele Tavani, 2013. "Bargaining over productivity and wages when technical change is induced: implications for growth, distribution, and employment," Journal of Economics, Springer, vol. 109(3), pages 207-244, July.
    19. Michalis Nikiforos, 2015. "Uncertainty and Contradiction: An Essay on the Business Cycle," Working Papers 1514, New School for Social Research, Department of Economics.
    20. Michalis Nikiforos & Duncan Foley, 2011. "Distribution and Capacity: Conceptual Issues and Empirical Evidence September," Working Papers 1105, New School for Social Research, Department of Economics.

    More about this item

    Keywords

    Bayesian sequential Monte Carlo methods; Bhaduri-Marglin accumulation function; Goodwin type models; US economy;
    All these keywords.

    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:100229. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.