Arbeitspapier
Post-Keynesian vignettes on secular stagnation: From labor suppression to natural growth
The stylized facts of neoliberalism include a decline in steady state rate of growth and labor share. Recent classical-Keynesian literature sees the latter as a cause for the former. A crucial element is the distinction between short and long run. The business cycle is profit-led and profit-squeeze, but the steady state features a wage led natural rate of growth. This paper presents simple macroeconomic models in this vein. Our starting point is to assume an adverse shock to real wage bargaining, which across all models depresses the labor share. We consider (i) a two-dimensional model in income-capital ratio and labor share, a (ii) three-dimensional model that adds the employment rate as state variable, and a (iii) four-dimensional model that furthermore endogenizes the savings propensity. Key results are that model (i) predicts an increase (decrease) in the warranted (natural) rate of growth, and thus does not generate balanced growth; (ii) resolves this problem and predicts stagnation in steady state, but implies a long run paradox of thrift; and (iii) allows for contextualization vis-à-vis the utilization controversy.
- Language
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Englisch
- Bibliographic citation
-
Series: Working Paper ; No. 2021-05
- Classification
-
Wirtschaft
General Aggregative Models: Keynes; Keynesian; Post-Keynesian
Aggregate Factor Income Distribution
Business Fluctuations; Cycles
Labor-Management Relations, Trade Unions, and Collective Bargaining: General
- Subject
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Goodwin theory
labor suppression
secular stagnation
- Event
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Geistige Schöpfung
- (who)
-
Rada, Codrina
Santetti, Marcio
Schiavone, Ansel
von Arnim, Rudiger
- Event
-
Veröffentlichung
- (who)
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The University of Utah, Department of Economics
- (where)
-
Salt Lake City, UT
- (when)
-
2021
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Rada, Codrina
- Santetti, Marcio
- Schiavone, Ansel
- von Arnim, Rudiger
- The University of Utah, Department of Economics
Time of origin
- 2021
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