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Cyclical Growth in a Goodwin-Kalecki-Marx Model

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  • Hiroaki SASAKI

Abstract

This paper presents a Kaleckian growth model that considers elements from Goodwin and Marx. The model has a system of differential equations for the rate of utilization, the profit share, and the rate of employment. We show that cyclical fluctuations occur depending on the sizes of the reserve-army effect and the reserve-army-creation effect. Moreover, we show that if the stable long-run equilibrium corresponds to the profit-led growth regime, an increase in the bargaining power of workers increases the rate of unemployment; on the other hand, if the equilibrium corresponds to the wage-led growth-regime, an increase in the bargaining power of workers decreases the rate of unemployment.

Suggested Citation

  • Hiroaki SASAKI, 2009. "Cyclical Growth in a Goodwin-Kalecki-Marx Model," TERG Discussion Papers 246, Graduate School of Economics and Management, Tohoku University.
    • Handle: RePEc:toh:tergaa:246
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    More about this item

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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