On the Dynamics of Profit- and Wage-led Growth

Amit Bhaduri

No 42, wiiw Working Papers from The Vienna Institute for International Economic Studies, wiiw

Abstract: This paper examines how variable output and profit share jointly determine investment and saving, while the difference between investment and saving determines the changes in output and profit share. Analysis of the resulting pair of differential equations yields novel implications for the multiplier process. In this more general framework a number of separate strands of the Keynesian inspired literature can be understood. In particular the model incorporating both forced saving and profit squeeze analyses stability of the dynamical system to bring out the complex relation between in- and out-of-equilibrium profit- and wage-led regimes.

Keywords: profit-led; wage-led; in- and out-of-equilibrium dynamics; local; Liapunov stability; stable-unstable bifurcation; forced saving; profit squeeze; multiplier (search for similar items in EconPapers)
JEL-codes: B22 C62 D33 E12 E22 E31 (search for similar items in EconPapers)
Date: 2007-03
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (4)

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