Demand-driven Goodwin cycles with Kaldorian and Kaleckian features

Rudiger von Arnim () and Jose Barrales
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Jose Barrales: University of Utah, USA and Universidad Católica de la Santísima Concepción, Chile

Review of Keynesian Economics, 2015, vol. 3, issue 3, 351-373

Abstract: Goodwin's original endogenous growth cycle describes a supply-driven counter-clockwise movement in employment rate and labor share (Goodwin 1967). Such cycles are observed in (US) data. Similarly, counter-clockwise cycles exist between utilization rate and labor share, and utilization rate and employment rate. This paper presents a critical discussion of two demand-driven frameworks to explain these cycles, namely a Goodwin–Kaldor model and a Goodwin–Kalecki model. The two models share important features. The main difference lies in the approach to the determination of the distribution of income. We argue that the Goodwin–Kalecki model's 'profit squeeze' is the preferable approach.

Keywords: endogenous cycles and growth; profit squeeze; forced saving (search for similar items in EconPapers)
JEL-codes: E12 E32 O41 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (42)

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