The middle class in macroeconomics and growth theory: a three-class neo-Kaleckian–Goodwin model

Thomas Palley

Cambridge Journal of Economics, 2015, vol. 39, issue 1, 221-243

Abstract: This paper presents a three-class growth model with labour market conflict. The classes are workers, a middle-management middle class and a ‘top’ management capitalist class. The model introduces personal income distribution that supplements conventional concerns with functional income distribution. Endogenously generated changes in personal income distribution can generate endogenous shifts from profit-led to wage-led regimes and vice versa. A three-class economy generates richer patterns of class conflict because the middle class has shared interests and conflicts with both capitalists and workers. Changes that benefit the middle class do not necessarily increase growth or employment or benefit workers.

Date: 2015
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Working Paper: The middle class in macroeconomics and growth theory: A three class neo-Kaleckian ? Goodwin model (2013)
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