Cyclical growth in a Goodwin–Kalecki–Marx model

Hiroaki Sasaki

Journal of Economics, 2013, vol. 108, issue 2, 145-171

Abstract: This paper presents a disequilibrium macrodynamic model that incorporates certain elements from Goodwin (the dynamics of the rate of employment and income distribution), Kalecki (an investment function independent of savings, and mark-up pricing in oligopolistic goods markets), and Marx (the reserve-army and reserve-army-creation effects). The model has a system of differential equations for the rate of utilization, profit share, and rate of employment. We show that there exist limit cycles that depend on the sizes of the reserve-army effect and reserve-army-creation effect. This implies that there exists a situation in which the economy experiences endogenous and perpetual growth cycles. 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; conversely, if the equilibrium corresponds to the wage-led growth-regime, an increase in the bargaining power of workers decreases the rate of unemployment. Copyright Springer-Verlag 2013

Keywords: Goodwin–Kalecki–Marx model; Cyclical growth; Reserve-army-creation effects; Hopf bifurcation; E12; E24; E25; E32; O41 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (43)

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Working Paper: Cyclical Growth in a Goodwin-Kalecki-Marx Model (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:108:y:2013:i:2:p:145-171

DOI: 10.1007/s00712-012-0278-4

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