Distribution-led Growth in the Long Run

Michalis Nikiforos

Economics Working Paper Archive from Levy Economics Institute

Abstract: The paper examines the long-run fluctuations in growth and distribution through the prism of wage-and profit-led growth. We argue that the relation between distribution of income and growth changes over time. We propose an endogenous mechanism that leads to fluctuations between wage- and profit-led periods. Our model is a linear version of Goodwin's predator–prey model, but with a reversal of the roles for predator and prey: the growth rate acts as the predator and the distribution of income as the prey. These fluctuations need to be taken into account when someone estimates empirically the effect of a change in distribution on utilization and growth. We also examine our argument in relation to the double movement of Karl Polanyi, the Kuznets curve, and the theories of long swings proposed by Albert Hirschman and Michal Kalecki.

Keywords: Distribution-led; Long Swings; Oscillations; Predator-prey (search for similar items in EconPapers)
JEL-codes: B22 E11 E12 E21 E22 E32 (search for similar items in EconPapers)
Date: 2014-09
New Economics Papers: this item is included in nep-fdg, nep-gro, nep-hme and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:lev:wrkpap:wp_814

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