progresso tecnologico distribuicao de renda e utilizacao da capacidade produtiva the paper presents a post keynesian growth model in which i the mark up rate varies in the long term due to a misalignment between the actual rate and the anticipated profit rate and ii the capital output ratio is not necessarily constant on the contrary it may shift as a result of the technical progress which according the harrod s typology can be neutral capital saving or capital intensive we demonstrate that the economic stability is only reached if the technical progress is neutral or capital intensive and the investiment is susceptible to fluctuations in the mark up rate after undergoing computer simulations we noticed that an endogenous transition from a wage led to a profit led accumulation regime is feasible furthermore we detected a tendency to the stabilization of the profit rate conditioned to a high savings out of profits ratio

profit maximising goes global the race to the bottom we explore four decades of cyclical and long run dynamics in income distribution and economic activity for a panel of 13 oecd countries as measured by the wage share and output gap when modeled as predator prey dynamics economic activity in oecd countries is weakly profit led convergence to a long run equilibrium is relatively slow delaying the profit squeeze stage for many years our race to the bottom model suggests that the oecd countries have been engaged in undercutting each other s real unit labour costs an extension of the model shows that the long run equilibrium has been shifting south west towards a lower wage share it may even be that this race has the undesirable consequence of decreasing economic activity

finance inflation and employment a post keynesian kaleckian analysis the purpose of this paper is to contribute to the post keynesian kaleckian macroeconomic literature we develop a macroeconomic model that explicitly integrates the role of borrowing and cash payment commitments on outstanding debt interest plus principal repayment into the consumption and investment expenditures as well as into the inflation generating process we explore the way that finance influences the distribution effects of inflation in the demand side of a money credit using economy we suggest a new phillips curve that encapsulates the impact of financial commitments on wage and profit claims we argue that high debt and cash payment commitments are likely to be associated with a positive demand side effect of inflation on the rate of employment and that they might be conducive to a negative supply side effect of employment on the inflation rate the author 2011 published by oxford university press on behalf of the cambridge political economy society all rights reserved

rising inequality as a cause of the present crisis the article argues that the economic imbalances that caused the present crisis should be thought of as the outcome of the interaction of the effects of financial deregulation with the macroeconomic effects of rising inequality in this sense rising inequality should be regarded as a root cause of the present crisis i identify four channels by which it has contributed to the crisis first rising inequality creates a downwards pressure on aggregate demand since poorer income groups have high marginal propensities to consume second international financial deregulation has allowed countries to run larger current account deficits and for longer time periods thus in reaction to potentially stagnant demand two growth models have emerged a debt led model and an export led model third in the debt led growth models higher inequality has led to higher household debt as working class families have tried to keep up with social consumption norms despite stagnating or falling real wages fourth rising inequality has increased the propensity to speculate as richer households tend to hold riskier financial assets than other groups the rise of hedge funds and of subprime derivatives in particular has been linked to rise of the super rich

wage norms capital accumulation and unemployment a post keynesian view the paper presents a post keynesian view of unemployment it argues first that the effective labour demand need not be downward sloping with respect to real wages and aggregate demand need not be downward sloping with respect to inflation second that there is a broad case for unemployment hysteresis understood as endogeneity of the non accelerating inflation rate of unemployment nairu based on social norms in wage bargaining and on the supply side effects of capital accumulation and third that much as keynes argued capital investment rather than labour market institutions is the key variable to explain changes in aggregate unemployment performance across countries and over time overall the paper advocates a keynesian view of the nairu where effective demand determines unemployment in the short run and the deviation of actual unemployment from the nairu determines the change in inflation in the medium term the nairu is endogenous and follows actual unemployment copyright 2011 oxford university press

a new and robust subgame perfect equilibrium in a model of triadic power relations abstract this note presents a new subgame perfect equilibrium in an infinitely repeated game which has basu s triadic model as the stage game oxford econ pap 38 1986 259 the payoff for the laborer is the same as in basu s model the equilibrium is more robust than the naqvi and wemhoner s solution j dev econ 47 1995 191 in the sense that the equilibrium does not require the same high degree of rationality simple well known strategies are applied and both the landlord and the merchant are better off than in the stage game in the equilibrium outcome the merchant receives a share of the extra profit from the extortionary labor contract

income distribution and the size of the financial sector a sraffian analysis the recent expansion of the financial sector has been accompanied by deregulation an acceleration of financial innovation and changes in income distribution the size of these phenomena has attracted the attention of the literature a large part has analysed the relationship between financial development and inequality arguing that the former tends to reduce the latter for a review of this literature see demirguc kunt and levine 2009 it moves from the claim that perfect credit markets reduce inequality by bringing about the efficient exploitation of personal qualities material endowments and the growth potentials of the economy credit market imperfections hold back the achievement of these results but are counteracted by deregulation and financial innovation which tend to eliminate rent positions

income distribution and current account imbalances we develop a three country stock flow consistent macroeconomic model to study the effects of changes in both personal and functional income distribution on national current account balances each country has a household sector and a non household corporate sector the household sector is divided into income deciles and consumer demand is characterized by upward looking status comparisons following the relative income hypothesis of consumption the strength of consumption emulation depends on country specific institutions the model is calibrated for the united states germany and china simulations suggest that a substantial part of the increase in household debt and the decrease in the current account in the united states since the early 1980s can be explained by the interplay of rising top end household income inequality and institutions on the other hand the weak domestic demand and increasing current account balances of germany and china since the mid 1990s are strongly related to shifts in the functional income distribution at the expense of the household sector

instruments randomization and learning about development there is currently much debate about the effectiveness of foreign aid and about what kind of projects can engender economic development there is skepticism about the ability of econometric analysis to resolve these issues or of development agencies to learn from their own experience in response there is increasing use in development economics of randomized controlled trials rcts to accumulate credible knowledge of what works without overreliance on questionable theory or statistical methods when rcts are not possible the proponents of these methods advocate quasirandomization through instrumental variable iv techniques or natural experiments i argue that many of these applications are unlikely to recover quantities that are useful for policy or understanding two key issues are the misunderstanding of exogeneity and the handling of heterogeneity i illustrate from the literature on aid and growth actual randomization faces similar problems as does quasi randomization notwithstanding rhetoric to the contrary i argue that experiments have no special ability to produce more credible knowledge than other methods and that actual experiments are frequently subject to practical problems that undermine any claims to statistical or epistemic superiority i illustrate using prominent experiments in development and elsewhere as with iv methods rct based evaluation of projects without guidance from an understanding of underlying mechanisms is unlikely to lead to scientific progress in the understanding of economic development i welcome recent trends in development experimentation away from the evaluation of projects and toward the evaluation of theoretical mechanisms jel c21 f35 o19

sovereign debt and joint liability an economic theory model for amending the treaty of lisbon as the euro area crisis drags on it is evident that a part of the problem lies in the architecture of debt within the euro area this study argues that at least part of the debt problem could be addressed through limited cooperative action entailing appropriately structured contracts generating cross country liability for sovereign debt incurred by individual nations within the european union such agreements are currently proscribed by the treaty of lisbon we construct a game theoretic model demonstrating that there exist self fulfilling equilibria which are pareto superior to the existing outcome and which would come into existence if cross country debt liabilities were permitted

stagnation or transformation of a dual economy through endogenous productivity growth a growth model is developed for an open dual economy the economy expands owing to a higher growth rate of labour productivity in the modern sector through the kaldor verdoorn channel and higher effective demand through a keynesian channel the model incorporates a retardation mechanism affecting the slopes of productivity and output growth schedules as labour surplus and economies of scale diminish a wage led or profit led regime and initial conditions may give rise to de industrialization in terms of both output and employment a growth trap sustaining a situation of structural heterogeneity or sustainable employment and adequate output and productivity growth

a cautionary note on tests of overidentifying restrictions in this note we argue that tests of overidentifying restrictions give little information on the validity of the moment conditions implied by the underlying economic model and therefore are mute about the possibility of identifying the parameters of interest

real exchange rate technological catching up and spillovers in a balance of payments constrained growth model abstract the main objective of this work is to investigate the theoretical interrelationships between economic growth the national innovation system nis and the real exchange rate rer in an export led growth model formally this work presents new changes in the kaldor dixon thirlwal s model by the introduction of the rer the nis and a function that captures the endogeneity of productivity in the industrial sector in the short term the equilibrium growth rate depends on the real exchange rate level and of the nis development which responds to the size of the technological gap the public and private investments in r d in relation to the output growth rate ratio and the absorption capacity for technological spillovers in the long run assuming the constancy of all exogenous variables the convergence of the growth process depends on the output growth elasticity in relation to exports the price elasticity of exports and the elasticity of productivity growth relative to output growth of the economy in general and to industry in particular

an ecological macroeconomics model the energy transition in the eu abstract the energy roadmap 2050 er2050 is committed to achieve the european union s emissions mitigation goals by reducing energy use and a transition to renewables the macroeconomic impacts of the ref16 and euco scenarios of this strategy have been reported to entail an absolute decoupling between gdp growth and energy use the aim of this paper is assessing the er2050 targets with a novel modelling methodology based on post keynesian economics i e demand led economic growth and ecological economics i e taking into account absolute biophysical energy availability constrains to economic growth thus this article presents the economy module of the integrated assessment model medeas europe combining system dynamics and input output analysis and evaluates the er2050 targets under different scenarios regarding primary income distribution foreign trade labour productivity industrial policy and working time reduction our results show that gdp growth and employment creation may be halted due to energy scarcity if the er2050 targets are met even considering great energy efficiency gains in addition the renewables share would increase enough to reduce the energy imports dependency but not sufficiently to meet the emissions targets only a post growth scenario would be able to meet the climate goals and maintain the level of employment

heterodox theories of economic growth and income distribution a partial survey heterodox theories of economic growth and income distribution are surveyed focusing on major theories and recent contributions first a general framework for examining growth and distribution is discussed in terms of which classical marxian and post keynesian kaleckian and other theories are presented since this framework examines how variables are determined in equilibrium second dynamics behind equilibria are examined focusing on goods market and labor market changes third the framework is extended in a variety of ways to examine additional models addressing productivity growth and technical change money and inflation finance and debt additional distributional considerations multisector issues open economy questions and the environment it is concluded that the literature on heterodox theories of growth and distribution is vibrant large and growing and addresses many issues that are ignored or neglected in orthodox theories including power unemployment and aggregate demand

moral hazard and nonmarket institutions dysfunctional crowding out or peer monitoring the authors examine a situation in which insurance is characterized by moral hazard when market insurance is provided supplementary mutual assistance between family and friends unobservable to market insurers will occur when nonmarket insurers have no better information than market insurers the mutual assistance not only crowds out market insurance but is also harmful and therefore dysfunctional alternatively when nonmarket insurers can observe each other s effort perfectly mutual assistance is beneficial these results point to the potential importance of peer monitoring mechanisms in mitigating moral hazard copyright 1991 by american economic association

semi autonomous household expenditures as the causa causans of postwar us business cycles the stability and instability of luxemburg type external markets similar patterns can be observed in post wwii us business cycles the initial upswings tend to be led by household investment and debt financed personal consumption expenditures which then wane in relative importance and lead downswings as those expenditures are financed in significant part by money creation they function as an external market driving accumulation by enabling monetary profit realisation in a way analogous to rosa luxemburg s treatment of the public and foreign sectors empirical studies on wage led profit led demand regimes typically exclude household investment or include it in with business investment this paper argues that it is vital to distinguish an independent role for semi autonomous household expenditures as a driver of effective demand and cyclical dynamics the failure to do so in empirical studies sustains misleading conclusions such as the perceived relevance of goodwin type profit squeeze cycles

income distribution and growth in east asia it is widely believed that the east asian economies performed exceptionally well not only in generating growth but also in keeping inequality low this study tries to answer the questions raised by the claims of exceptionality of income distribution in east asia central findings are that only japan korea and taiwan have legitimate claims to low inequality that the east asian economies distinguished themselves by their ability to translate high profit shares into high savings and investment rates and that low inequality and high profit shares coexisted primarily due to the unusually even distribution of wealth

growth and income distribution with the dynamics of power in labour and goods markets the interaction between economic growth and income distribution is examined using kaleckian post keynesian models in which there are lags in investment and in which the dynamics of income distribution between wages and profits depends on changes in power relations in both the labour market and goods market by examining these two influences on distributional dynamics simultaneously the relative strength of which can change over the growth process it is shown that the growth distributional dynamics can involve non linearities multiple equilibria and instability the implications of policy induced changes including those in macroeconomic policy and labour market and antitrust policies on aggregate demand and distribution are examined for both wage led and profit led growth regimes copyright oxford university press

demand led growth and accommodating supply we model of demand led growth with endogenous adjustment of labour supply and productivity an approach that reconciles harrod s warranted rate of demand growth with supply the model delivers a range of growth paths and unemployment rates rather than a single natural rate theoretically the steady state growth path may be dynamically stable or unstable but empirical calibration favours stability we show analytically that if demand dynamics are stable supply will converge to the demand determined growth path while a minimum unemployment rate ultimately imposes a supply constraint on growth empirical results show that a wide range of growth rates are feasible across different demand regimes the results explain how economies can become trapped with low growth due to weak demand or fiscal austerity and suggest policy responses to stagnant demand

gender inequality and economic growth a cross country analysis abstract this paper investigates empirically the determinants of economic growth for a set of semi industrialized export oriented economies in which women provide the bulk of labor in the export sector the primary hypothesis tested is that gender inequality which contributes to women s relatively lower wages was a stimulus to growth via the effect on exports during 1975 95 empirical analysis shows that gdp growth is positively related to gender wage inequality in contrast to recent work which suggests that income inequality slows growth evidence also indicates that part of the impact of gender wage inequality on growth is transmitted through its positive effect on investment as a share of gdp

international credit and welfare a paradoxical theorem and its policy implications abstract this paper considers a developing nation that faces a foreign exchange shortage and hence its demand for foreign goods is limited both by its income and its foreign exchange balance availability of international credit relaxes the second constraint we develop a simple model of strategic interaction between lending institutions and firms and show that the availability of international credit at concessionary rates can leave the borrowing nation worse off than if it had to borrow money at higher market rates this paradox of benevolence is then used to motivate a discussion of policies pertaining to international lending and the southern government s method of rationing out foreign exchange to the importers

changes in the cyclical pattern of real wages evidence from nine countries 1955 80 monetary policy in the united kingdom the monetarist vice has gripped the economy even longer and similar deflationary policies have been in effect in other western economies interestingly enough these policies were instituted in the context of a prolonged period of economic decline annual average rates of growth of gross domestic product for nine oecd countries fell from 6 8 to 5 o to 2 6 over the periods i955 66 i966 73 and i973 79 2 similarly unemployment has risen dramatically in the last io years the causes of slow growth and high unemployment are undoubtedly various however it is clear that restrictive macroeconomic policy has played an important role that is the recent situation is at least in part attributable to a deliberate effort to induce an economic slump the task of systematically examining the origins and motivations of this policy still awaits us however this paper presents an account of a general development in the pattern of real wages over the business cycle which is a plausible determinant of current policy the evidence indicates that short run cyclical movements in output no longer exert a determinate influence on real wage growth a development which may have been the impetus for long term deflation this account is based on an econometric study of nine countries over the period i955 80 the study has three noteworthy econometric features the first is that data from the nine countries are combined in a pooled model with homogeneous coefficients the use of a cross national sample ensures against the attribution of general theoretical status to particular empirical findings from a single country 3 second the units of observation are business cycle turning

north south terms of trade and growth a macroeconomic framework on kaldorian lines abstract in the presidential address to the royal economic society 1976 nicholas kaldor presented an informal model of the world economy on this kaldorian line this paper presents a north south growth model it has been observed that there is no relationship between the monopoly power of the northern capitalists and the north south terms of trade technical progress in the south has a declining impact on the southern terms of trade while technical progress in the north does not have a similar impact on the northern terms of trade furthermore this model shows that the south as a whole cannot speed up its long term growth rate through export promotion rather it faces a terms of trade loss

a supermultiplier stock flow consistent model the return of the paradoxes of thrift and costs in the long run supermultiplier models have been recently brought to the post keynesian debate yet these models still rely on quite simple economic assumptions being mostly ow models which omit the nancial determinants of autonomous expenditures since the output growth rate converges in the long run to the exogenously given growth rate of non capacity creating autonomous expenditure and the utilization rate moves towards the normal utilization rate the paradoxes of thrift and costs remain valid only as level e ects average growth rates this paper investigates whether the core conclusions of supermultiplier models hold in a more complex economic framework described by means of a supermultiplier sfc model in which private business investment is assumed to be completely induced by income while the autonomous expenditure component in this case consumption out of wealth becomes endogenous the results of the numerical simulation experiments suggest that the paradox of thrift can remain valid in terms of growth e ects and that a lower pro t share can also be associated to a higher accumulation rate though with a lower pro t rate

inflationary price stability and the great crash an early analysis reconsidered the historical account of american economic conditions before the great crash in a d gayer s monetary policy and economic stabilisation 1935a reflects an inter war debate over the consequences of a stable price level when underlying productivity is rising strongly its account evokes in several ways recent concern over the emergence of financial sector instability under inflation targeting regimes a theoretical treatment of the main analysis permits both comparison between different perspectives in thinking at the time and a critical re examination of the relevance of this thinking to modern policy dilemmas nominal targets may have destabilising real sector consequences

inequality and growth uncovering the main conclusions from the empirics abstractthis paper is a critical survey of the empirical literature on the effects of inequality on economic growth we conclude that it is most likely that the disparities found in the results are due to differences in the type of countries and time periods included in the samples the variable used to measure inequality the structure of the data and the estimation techniques these findings suggest that the mechanisms that link inequality to growth are likely to operate differently in different circumstances an element that may offer important guidelines for both policy makers and researchers

company interests and foreign aid policy playing donors off against one another abstract the evidence on conditionality indicates that this instrument sometimes works and sometimes does not work we suggest that third parties to the donor recipient relationship influence the aid disbursement the halt in aid that should follow non compliance could trigger the recipient to cancel contracts with companies from donor countries which creates incentives for the companies to put pressure towards aid disbursement we use a multi agent triadic model of the relationships between a recipient and two donors and two companies to illustrate that recipients may act strategically to make third parties like companies and others influence the disbursement decision failing to take account of third parties role yields the opposite result conditionality becomes successful

location matters historical racial segregation and intergenerational mobility abstract this paper explores historical patterns of racial segregation and its relationship with the observed spatial variation in contemporaneous economic mobility established in chetty et al 2014 we combined data from the equality of opportunity project with a novel measure of racial segregation developed in logan and parman forthcoming and find that past racial segregation explains a significant portion of the spatial variation in intergenerational mobility these findings are consistent with models showing that persistent institutional factors may drive long term outcomes across areas racial segregation and the environment that fosters it may diminish upward economic mobility by reducing access to networks labor and capital markets and political institutions if so then reducing the impact of these persistent processes may be key to mitigating current day gaps in wealth income and overall well being

externalities in economies with imperfect information and incomplete markets this paper presents a simple general framework for analyzing externalities in economies with incomplete markets and imperfect infonnation by identifying the pecuniary effects of these externalities that net out the paper simplifies the problem of determining when tax interventions are pareto improving the approach indicates that such tax interventions almost always exist and that equilibria in situations of imperfect information are rarely constrained pareto optima it can also lead to simple tests based on readily observable indicators of the efficacy of particular tax policies in situations involving adverse selection signaling moral hazard incomplete contingent claims markets and queue rationing equilibria traditional discussions of externalities have emphasized the distinction between technological externalities in which the action of one individual or firm directly affects the utility or profit ofanother and pecuniary externalities in which one individual s or firm s actions affect another only through effects on prices while the presence of technological externalities imply in general that a competitive equilibrium may not be pareto efficient pecuniary externalities hy themselves are not a source of inefficiency the fact that prices change has of course important consequences there are both distributional and allocational effects but the distribution effects net out gains for example hy firms whose prices increase are precisely offset by losses e g to individuals who must pay higher prices and there are no welfare losses from the allocation effects as long as the price changes involved are small if firms are maximizing profits and individuals are maximizing utility both facing prices that correctly refiect opportunity costs then standard envelope theorem arguments imply that changes in profits or utility induced by changes in allocations resulting from any small change in prices are negligible

wage led growth in the eu15 member states the effects of income distribution on growth investment trade balance and inflation this paper estimates a multi country demand led growth model for eu15 countries a decrease in the share of wages in national income in isolation leads to lower growth in finland france germany greece italy luxembourg netherlands portugal spain sweden and the united kingdom whereas it stimulates growth in austria belgium denmark and ireland however a simultaneous decline in the wage share leads to an overall decline in eu15 gdp hence eu15 as a whole is a wage led economy furthermore austria and ireland also experience negative effects on growth when they decrease their wage share along with their trading partners the results indicate that a decline in the wage share has had significant negative effects on growth in the eu15 countries and supports the case of wage coordination we present different wage led recovery scenarios taking into account further effects of a change in the wage share on prices nominal unit labour costs investment and net exports

determinants of labour s income share in the era of financialisation numerous studies have analysed the decline in the labour share of income but only few have linked it to the increase in financialisation the process of financialisation can roughly be described as an increasing importance of the financial sector that had an impact on the distribution between wages and profits on the one hand and retained earnings and financial income in the form of dividends and interests on the other hand this article seeks to explore the relationship between financialisation and labour s share of income using a time series cross sectional dataset of 13 countries over the time period from 1986 until 2007 the results suggest that there is indeed a relationship between increasing dividend and interest payments of non financial corporations and the decline of the share of wages in national income other factors that can account for the decline relate to globalisation and a decrease in the bargaining power of labour

the effects of financialization on investment evidence from firm level data for the uk this paper estimates the effects of financialization on physical investment in the uk using panel data based on balance sheets of publicly listed non financial companies supplied by worldscope for the period 1985 2013 we find robust evidence of an adverse effect of not only financial payments interests and dividends but also financial incomes on the rate of accumulation the negative impacts of financial incomes from interests and dividends are particularly strong for the pre crisis period our findings support the financialization thesis that the increasing orientation of the non financial sector towards financial activities is ultimately leading to lower physical investment hence to stagnant or fragile growth as well as long term concerns for productivity

growth distribution and sectoral heterogeneity reading the kaleckians in latin america abstract the aim of this paper is to explore a parallelism between two episodes in the history of economic thought in order to suggest that the interaction between them can contribute to the research on kaleckian growth and distribution models first a brief summary of the theoretical development from steindl s stagnationist claims to the debate about demand regimes is offered then a more detailed account is provided of the latin american debate that began with furtado s stagnationist claims and resulted in the formulation of models of social articulation and disarticulation finally an analytical classification of kaleckian and latin american growth and distribution models is provided indicating the way in which sectoral heterogeneity and demand composition can act as a plausible link between growth and distribution

personal income inequality and aggregate demand this paper presents a theoretical and empirical investigation of how changes in the size distribution of income can aect aggregate demand and the demand regime of an economy after presenting empirical evidence for the us economy that the propensity to save increases signicantly from the bottom to the top quintile of wage earners we demonstrate that more equal distributions always lead to higher output in the traditional neo kaleckian macroeconomic model we also present conditions under which a reduction of income inequality among workers turns demand more wage led this view is supported by the results of an econometric study for the united states 1967 2010 which show that the rise after 1980 in income inequality has made the us economy more prot led

growth and inequality revisited the role of primary distribution of income a new approach for understanding today s economic and social crises this paper presents an innovative interpretative scheme of the relationship between economic growth and income inequality taking the primary distribution of income between profits and wages as the main explanatory variable for that purpose two lines of research are taken as a reference point first the bhaduri marglin model which explains growth in terms of the effect that factor shares have on aggregate demand and second recent empirical analyses that also use the functional distribution to explain the evolution of the top income shares and the gini index after reviewing the literature on the growth inequality relationship the paper identifies several relationships between primary and interpersonal distributions of income in each of the bhaduri marglin model s growth regimes it finds multiple causal relationships between growth and inequality as well as inequality and growth clarifying their implications for economic and social stability the paper offers final reflections on the way the scheme can further the understanding of current economic and social crises

peer monitoring and credit markets a major problem for institutional lenders is ensuring that borrowers exercise prudence in the use of the funds so that the likelihood of repayment is enhanced one partial solution is peer monitoring having neighbors who are in a good position to monitor the borrower be required to pay a penalty if the borrower goes bankrupt peer monitoring is largely responsible for the successful financial performance of the grameen bank of bangladesh and of similar group lending programs elsewhere but peer monitoring has a cost it transfers risk from the bank which is in a better position to bear risk to the cosigner in a simple model of peer monitoring in a competitive credit market this article demonstrates that the transfer of risk leads to an improvement in borrowers welfare

financialisation and tendencies towards stagnation the role of macroeconomic regime changes in the course of and after the financial and economic crisis 2007 09

internal devaluation in a wage led economy the case of spain the aim of this paper is to use the theoretical distinction between wage led and profit led economies to consider the impact of internal devaluation policy on gdp growth for the case of spain we assess to what extent wage devaluation in spain has proven useful vis a vis triggering an exportled strategy boosting aggregate demand and overcoming the crisis for said purpose we estimate a bhaduri marglin model drawing on quarterly data from eurostat and we expand the traditional model to take into account the effect of private debt on consumption and investment our main conclusion is that the spanish economy can be characterized as a wage led economy and that therefore a wage share decrease proves counterproductive to growth according to our calculations internal devaluation policy detracted an average of 0 3 percentage points of annual economic growth during the period 2010 2016

the effects of income distribution and fiscal policy on aggregate demand investment and the budget balance the case of europe this paper develops a multi country post kaleckian model that incorporates the role of the government one key novelty of the model is that it integrates cross country effects of both changes in income distribution and fiscal policy the model is used to estimate econometrically the effects of income distribution and fiscal policy on the components of aggregate demand and the budget balance in eu15 countries the results show that a simultaneous increase in the wage share in all eu15 countries would increase demand and the primary budget balance in all countries a simultaneous increase in government spending turns out to boost economic activity in all the eu15 countries indicating the positive economic effects of expansionary fiscal policy moreover a progressive tax policy that would be implemented simultaneously at the eu level would lead to an increase in output in all countries

comparative evaluation of post keynesian interest rate rules income distribution and firms debts for macroeconomic performance this article investigates the macroeconomic effects of firms debts and income distribution on economic growth and inflation under three different post keynesian interest rate rules the kansas city rule the smithin rule and the pasinetti rule by setting up a dynamic post keynesian model after reviewing debates on the post keynesian interest rate policies this article evaluates the relative merits of the three rules in their relationship with economic growth regimes and inflation dynamics accordingly this article explicitly shows that i a policy rule works effectively under some economic growth and inflation patterns but not necessarily under other patterns ii a policy rule contributing to high economic growth may not always be compatible with stabilisation of economic growth and iii the macroeconomic effects of debt and income distribution on economic growth and inflation are closely related to the choice of interest rate rule

real exchange rate levels and economic development theoretical analysis and econometric evidence according to the development approach to exchange rates competitive currencies have been a key factor in most east and southeast asian successful growth strategies there is also today an important empirical literature that relates overvaluations to low per capita growth rates while the econometric literature on this issue is relatively rich theoretical analysis of channels through which real exchange rate levels could affect economic development are very scarce this paper intends to contribute to the debate by bringing more theoretical elements and providing new econometric evidence to the connections between real exchange rate levels and development

distribution aggregate demand and productivity growth theory and empirical results for six oecd countries based on a post kaleckian model empirical research based on the bhaduri marglin variant of the kaleckian model has recently shown that aggregate demand in many medium sized and large open economies tends to be wage led in the medium to long run even in a period of increasing globalisation in this paper we extend this type of analysis and integrate the effects on productivity growth theoretically and empirically productivity growth is introduced into the theoretical model making use of the verdoorn effect or of kaldor s technical progress function and hence of a positive relationship between gdp or capital stock growth and productivity growth further on a cost push or marx hicks effect and hence a positive impact of real wage growth or the wage share on productivity growth is taken into account in the empirical part we estimate productivity growth equations for six countries introducing these two effects finally economic policy conclusions are drawn

down from the mountain skill upgrading and wages in appalachia the appalachian region has experienced persistently higher poverty and lower earnings than the rest of the united states we examine whether skill differentials or differences in the returns to those skills lie at the root of the appalachian wage gap using census data we decompose the appalachian wage gap using both mean and full distribution methods our findings suggest that significant upgrading of skills within the region has prevented the gap from widening over the last 20 years additionally we find that urban areas within appalachia have not experienced the rise in returns to skills as in non appalachian urban areas

efficient estimation with panel data when instruments are predetermined an empirical comparison of moment condition estimators i examine the empirical performance of instrumental variables estimators with predetermined instruments in an application to life cycle labor supply under uncertainty the estimators studied are two stage least squares generalized method of moments gmm forward filter independently weighted gmm and split sample instrumental variables i compare the bias efficiency trade off for the estimators using bootstrap algorithms suggested by freedman and by brown and newey results indicate that the downward bias in gmm is quite severe as the number of moment conditions expands outweighing the gains in efficiency the forward filter estimator however has lower bias and is more efficient than two stage least squares

unemployment and the real wage the economic basis for contesting political ideologies using the keynesian theory of effective demand this paper demonstrates how particular models such as that of cooperative capitalism enunciated by the left keynesian social democrats the marxian model of profit squeeze emphasizing distributive conflict and even the conservative model relying on supply side stimulus fit in as particular variants of a more general theoretical scheme through a reconstruction of the familiar is schedule the argument is weaved around the theme of the relations between unemployment and real wage in the context of both a closed and an open economy to explain the common macroeconomic basis of contesting ideologies copyright 1990 by oxford university press

goodwin cycles and the bopc growth paradigm a macrodynamic model of growth and fluctuations abstract the paper builds a non linear macrodynamic model to study the relation between the functional distribution of income technological progress and economic growth in the short term the interaction between the productivity regime the demand regime and the distributive conflict generates cyclical paths a la goodwin in the long term output growth rate is constrained by the balance of payments a la thirlwall in which the elasticities of foreign trade are modeled as a function of the complex relation between the wage share and the innovation capabilities of theeconomy

macroeconomic structure endogenous technical change and growth this paper shows the relevance of the macroeconomic structure that governs short term changes in aggregate demand and income distribution in the determination of long term growth rates it develops a new growth model by introducing endogenous technical change into a keynesian marxist synthesis model of accumulation and distribution this model has multiple equilibria a high growth equilibrium that is stable if rising wage share leads to an increase in investment and real wages are somewhat rigid and a low growth equilibrium that is stable under opposite circumstances based on this result the paper discusses how institutions and history matter in long term growth copyright 1994 by oxford university press

some instability puzzles in kaleckian models of growth and distribution a critical survey we tackle the issue of the possible instability of the kaleckian distribution and growth model distinguishing between keynesian and harrodian instability we review various mechanisms that have been proposed by critics of the kaleckian model to tame harrodian instability while bringing back the rate of utilisation to its normal rate we find that the mechanisms that have been suggested are far from convincing therefore we conclude that it may be premature for the critics of the kaleckian model to dismiss the endogeneity of the rate of capacity utilisation in long run growth equilibrium copyright the author 2010 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

endogenous economic growth a new approach this new approach incorporates on the demand side the problem of effective demand and unemployment while rejecting on the supply side the oversimplistic use of a production function with or without capital labour substitution the focus on the adoption and diffusion of labour productivity growth permits viewing supply as being driven endogenously by inter class conflict over distribution as well as inter class conflict among rival firms over market shares the result is a race between growth rates in labour productivity and in the real wage rate which drives demand and productivity growth on the one hand while making wage share reasonably constant on the other the existence and stability properties of the steady state are also examined copyright 2006 oxford university press

stock flow consistent macroeconomic models a survey the stock flow consistent sfc modelling approach grounded in the pioneering work of wynne godley and james tobin in the 1970s has been adopted by a growing number of researchers in macroeconomics especially after the publication of monetary economics by godley and lavoie which provided a general framework for the analysis of whole economic systems and the recognition that macroeconomic models integrating real markets with flow of funds analysis had been particularly successful in predicting the great recession of 2007 2009 we introduce the general features of the sfc approach for a closed economy showing how the core model has been extended to address issues such as financialization and income distribution we next discuss the implications of the approach for models of open economies and compare the methodologies adopted in developing sfc empirical models for whole countries we review the contributions where the sfc approach is being adopted as the macroeconomic closure of microeconomic agent based models and how the sfc approach is at the core of new research in ecological macroeconomics finally we discuss the appropriateness of the name sfc for the class of models we survey

debt driven growth wealth distribution and demand in oecd countries the paper investigates the effects of changes in the distribution of income and in wealth on aggregate demand and its components we extend the bhaduri and marglin 1990 model to include personal income inequality as well as asset prices and debt this allows for an evaluation of the wage or profit led nature of demand regimes of the expenditure cascade argument frank et al 2010 and several hypotheses regarding the effects of wealth and debt our estimates are based on a panel of 18 oecd countries covering the period 1980 2013 for the full panel the average demand regime is found to be wage led we fail to find effects of personal inequality but do find strong effects of debt and property prices which have been the major drivers of aggregate demand in the decade prior to the 2007 crisis

monetary policy and macroeconomic stability under alternative demand regimes in this paper we analyse the interaction of macroeconomic activity and the dynamics of real wages from a theoretical perspective by means of a system dynamic approach we investigate the economic viability of wage and profit led demand regimes by analysing not only the effect of real wages on output but also the feedback mechanisms of macroeconomic activity on the real wages furthermore in this context we focus on the role of monetary policy as a macroeconomic stabilisation mechanism in the two mentioned demand regimes

on persistent poverty in a rich country we examine differences in income within the united states and the regions of persistent poverty that have arisen using a newly assembled county level data set linking 19th century census data with contemporary data we identify the roles of current differences in aggregate production technologies and factor endowments together with contributions of historical institutions culture geography and human capital we allow for possible cross county factor mobility via a correlated random effects gmm estimator and find evidence of significant regional differences in production technologies our decompositions of the poor nonpoor income gap suggest that at least three fourths of the gap is explained by differences in productive factors persistently poor counties are different and poorer primarily because they have lower levels of factors of production not because they use the factors they have less efficiently together historical and contemporary human capital explain over half of the overall income gap between persistently poor and nonpoor counties