Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/338094 
Year of Publication: 
2026
Series/Report no.: 
ZÖSS Discussion Paper No. 126
Publisher: 
Universität Hamburg, Zentrum für Ökonomische und Soziologische Studien (ZÖSS), Hamburg
Abstract: 
This paper investigates the interplay between distributive conflict, wage dynamics, and persistent unemployment within a Kaleckian framework, emphasizing the long-memory properties of wages. We develop a stochastic model in which wages adjust adaptively to cumulative historical discrepancies between prices and wages, reflecting backward-looking expectations, institutional rigidities, and distributive conflict. Applying this framework to Germany over the period 1990-2024, we provide empirical evidence that persistent price- wage divergences generate long-lasting effects on real wages and aggregate demand. Within a Kaleckian perspective in which investment and employment are demand-driven, these wage dynamics contribute to the persistence of unemployment by weakening consumption and effective demand over time. Our findings highlight that long-memory wage adjustment amplifies the macroeconomic consequences of distributive conflict and inflation, underscoring the importance of historical wage inertia in shaping employment outcomes. The results offer new insights into the structural origins of persistent unemployment in advanced economies.
Subjects: 
Kaleckian economics
wage-price dynamics
long-memory
distributive conflict
persistent unemployment
JEL: 
E12
E24
E32
C22
J30
Document Type: 
Working Paper

Files in This Item:
File
Size





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