A Neo-Kaleckian Model of Profit Sharing, Capacity Utilization and Economic Growth

Gilberto Lima

No 2011_05, Working Papers, Department of Economics from University of São Paulo (FEA-USP)

Abstract: This paper sets forth a Neo-Kaleckian model of capacity utilization and growth with distribution featuring a profit-sharing arrangement. While a given proportion of firms compensate workers with only a base wage, the remaining proportion do so with a base wage and a share of profits. Consistent with the empirical evidence, workers hired by profit-sharing firms have a higher productivity than their counterparts in base-wage firms. While a higher profit-sharing coefficient raises capacity utilization and growth irrespective of the distribution of compensation strategies across firms, a higher frequency of profit-sharing firms does likewise only if the profit-sharing coefficient is sufficiently high.

Keywords: profit sharing; productivity; capacity utilization; growth (search for similar items in EconPapers)
JEL-codes: E23 E24 J33 (search for similar items in EconPapers)
Date: 2011-11-11
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http://onlinelibrary.wiley.com/doi/10.1111/j.1467-999X.2011.04146.x/abstract (application/pdf)

Related works:
Journal Article: A NEO‐KALECKIAN MODEL OF PROFIT SHARING, CAPACITY UTILIZATION AND ECONOMIC GROWTH (2012)
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