Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/277388 
Authors: 
Year of Publication: 
2017
Citation: 
[Journal:] European Journal of Economics and Economic Policies: Intervention (EJEEP) [ISSN:] 2052-7772 [Volume:] 14 [Issue:] 2 [Year:] 2017 [Pages:] 200-221
Publisher: 
Edward Elgar Publishing, Cheltenham
Abstract: 
While Kaleckian authors tend to find that economies are in a wage-led demand regime, Goodwinian authors tend to find that economies are in a profit-led demand regime. This paper avoids econometric technicalities and provides instead a historical perspective, going back to the empirical study of Boddy and Crotty and that of Weisskopf, as well as to the debates that arose in the 1980s between but also within the two main strands of heterodox macroeconomics: the Marxians and the post-Keynesians. This hopefully will help to shed some light on the more recent controversy over the existence of profit-led or wage-led demand regimes. A noteworthy feature of the paper is the emphasis on the existence of overhead labour costs and hence the distinction between managers and ordinary workers. These are likely to bias empirical measurements of demand regimes towards the profit-led regime at high-frequency data; they may also give rise to paradoxical results; and they justify the claim that an increase in the wage share of ordinary workers is likely to have a positive effect on aggregate demand even if economies are profit-led.
Subjects: 
overhead labour costs
wage-led regimes
profit squeeze
neo-Kaleckian models
growth and distribution
JEL: 
B5
E12
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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