EconPapers    
Economics at your fingertips  
 

The Dynamics of Profit- and Wage-led Expansion: A Note

Amit Bhaduri

Chapter 11 in Wages, Employment, Distribution and Growth, 2006, pp 247-253 from Palgrave Macmillan

Abstract: Abstract Any redistribution of income between profits and wages would have contradictory effects in terms of aggregate demand, so long as the propensities to consume are different for the two classes. For instance, the lowering of the real wage rate would tend to depress total consumption expenditure by redistributing income against the wage-earners with a higher propensity to consume. At the same time, it might also encourage investment by increasing the margin of profit per unit of sale. Depending on which effect dominates quantitatively, two alternative regimes or paths both led by demand emerge: the consumption-or wage-led path which has also been called ‘stagnationist’, and the investment-or profit-led path called ‘exhilarationist’ (Bhaduri and Marglin 1990; Marglin and Bhaduri 1990).

Keywords: Income Distribution; Product Market; Capacity Utilization; Excess Demand; Full Employment (search for similar items in EconPapers)
Date: 2006
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-37178-1_12

Ordering information: This item can be ordered from
http://www.palgrave.com/9780230371781

DOI: 10.1057/9780230371781_12

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2025-03-23
Handle: RePEc:pal:palchp:978-0-230-37178-1_12