Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/105785 
Authors: 
Year of Publication: 
2014
Series/Report no.: 
Working Paper No. 2014-07
Publisher: 
University of Massachusetts, Department of Economics, Amherst, MA
Abstract: 
A large body of literature inspired by the seminal contribution of Marglin and Bhaduri (1988) has debated the distributional determinants of demand and growth. A general conclusion has been that open economy considerations weaken the potential for a wage-led growth regime. How- ever, this literature has largely ignored asset portfolio considerations and the stock and flow interactions that result from the feedback from savings to wealth and from wealth to the current account. This paper develops a theoretical framework that speci.es a fuller system of (instantaneous) flow equilibria embedded in a medium-run framework with stable steady state stocks of real and financial assets. The balance of payments constraint that results ensures that simply raising the wage does not yield a higher stock of real capital. A lower mark-up may increase the steady state stock of capital but only through the relative price channel. These results are much stronger than those derived by existing literature, and more importantly, emerge regardless of whether the demand regime is wage-led or profit-led in autarky.
Subjects: 
Wage-led growth
stagnationism
exhilarationism
neo-Kaleckian models
distribution
accumulation
JEL: 
F32
F43
E64
Document Type: 
Working Paper

Files in This Item:
File
Size
250.19 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.