 Do the economic policies of Japan’s “New form of capitalism” create a virtuous cycle of growth and distribution?Hiroaki Sasaki and Aya Mizutani Structural Change and Economic Dynamics, 2025, vol. 75, issue C, 501-512 Abstract: In contemporary Japan, the realization of a virtuous cycle of growth and distribution (i.e., how the “new form of capitalism” should be) has been discussed. To examine the validity of economic policies suggested by the new form of capitalism, we present a Kaleckian model that considers the wage gap among workers and the retained earnings of firms, and investigate the effects of minimum wage, the rate of retained earnings, and managerial profit sharing on growth and distribution. We reveal that a decrease in the rate of retained earnings and an increase in managerial profit sharing do not lead to a virtuous cycle of growth and distribution, whereas a rise in the minimum wage increases the income share of workers and the economic growth rate. However, an increase in the minimum wage has a negative impact on employment, whereas a decline in the rate of retained earnings and an expansion of managerial profit sharing have a positive effect. Keywords: Growth and distribution; Kaleckian model; Minimum wage; Retained earnings; Managerial profit sharing; Japan’s new form of capitalism (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:75:y:2025:i:c:p:501-512 DOI: 10.1016/j.strueco.2025.08.018 Access Statistics for this article Structural Change and Economic Dynamics is currently edited by F. Duchin, H. Hagemann, M. Landesmann, R. Scazzieri, A. Steenge and B. Verspagen More articles in Structural Change and Economic Dynamics from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.